Team Governance: Empowerment or Hierarchical Control
We investigate a team setting in which workers have different degrees of commitment to the outcome of their work. We show that if there are complementarities in production and if the team manager has some information about team members, interventions that the manager undertakes in order to assure certain efforts may have destructive effects: they can distort the way workers perceive their fellow workers and they may also lead to a reduction of effort by those workers that care most about output. Moreover, interventions may hinder the development of a cooperative organizational culture in which workers trust each other. Thus, our framework provides some first insights into the costs and benefits of interventions in teams. It identifies that team governance is driven by the importance of tasks that cannot be monitored. The more important these tasks, the more likely it is that teams are empowered.
|Date of creation:||Oct 2007|
|Date of revision:||Oct 2007|
|Contact details of provider:|| Postal: Grabengasse 14, D-69117 Heidelberg|
Phone: +49-6221-54 2905
Fax: +49-6221-54 2914
Web page: http://www.awi.uni-heidelberg.de/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Roberto Galbiati & Karl Schlag & Joël van der Weele, 2009.
"Can Sanctions Induce Pessimism? An Experiment,"
Labsi Experimental Economics Laboratory University of Siena
024, University of Siena.
- Ellingsen, Tore & Johannesson, Magnus, 2006.
"Pride and Prejudice: The Human Side of Incentive Theory,"
CEPR Discussion Papers
5768, C.E.P.R. Discussion Papers.
- Tore Ellingsen & Magnus Johannesson, 2008. "Pride and Prejudice: The Human Side of Incentive Theory," American Economic Review, American Economic Association, vol. 98(3), pages 990-1008, June.
- Michael Kosfeld & Ferdinand von Siemens, 2007.
"Competition, Cooperation, and Corporate Culture,"
IEW - Working Papers
328, Institute for Empirical Research in Economics - University of Zurich.
- Che,Y.K. & Yoo,S.W., 1998.
"Optimal incentives for teams,"
8, Wisconsin Madison - Social Systems.
- Itoh, Hideshi, 1991. "Incentives to Help in Multi-agent Situations," Econometrica, Econometric Society, vol. 59(3), pages 611-636, May.
- Sliwka, Dirk, 2003.
"On the Hidden Costs of Incentive Schemes,"
IZA Discussion Papers
844, Institute for the Study of Labor (IZA).
- Uri Gneezy & Aldo Rustichini, 2000.
"A fine is a price,"
Natural Field Experiments
00258, The Field Experiments Website.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
- Tim Besley & Maitreesh Ghatak, 2005.
"Competition and incentives with motivated agents,"
LSE Research Online Documents on Economics
928, London School of Economics and Political Science, LSE Library.
- Timothy Besley & Maitreesh Ghatak, 2003. "Competition and incentives with motivated agents," LSE Research Online Documents on Economics 2202, London School of Economics and Political Science, LSE Library.
- Besley, Timothy J. & Ghatak, Maitreesh, 2004. "Competition and Incentives with Motivated Agents," CEPR Discussion Papers 4641, C.E.P.R. Discussion Papers.
- Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
- Itoh, Hideshi, 1992. "Cooperation in Hierarchical Organizations: An Incentive Perspective," Journal of Law, Economics and Organization, Oxford University Press, vol. 8(2), pages 321-45, April.
- Emmanuelle Auriol & Guido Friebel & Lambros Pechlivanos, 2002. "Career Concerns in Teams," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 289-307, Part.
- Herold, Florian, 2010. "Contractual incompleteness as a signal of trust," Games and Economic Behavior, Elsevier, vol. 68(1), pages 180-191, January.
- Bengt Holmstrom, 1982.
"Moral Hazard in Teams,"
Bell Journal of Economics,
The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
- In-Koo Cho & David M. Kreps, 1997.
"Signaling Games and Stable Equilibria,"
Levine's Working Paper Archive
896, David K. Levine.
- Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, vol. 78(3), pages 275-299, November.
- Armen A. Alchian & Harold Demsetz, 1971.
"Production, Information Costs and Economic Organizations,"
UCLA Economics Working Papers
10A, UCLA Department of Economics.
- Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
- Wendelin Schnedler, 2007.
"You Don't Always Get What You Pay For,"
0452, University of Heidelberg, Department of Economics, revised Sep 2007.
- Seabright Paul B, 2009. "Continuous Preferences and Discontinuous Choices: How Altruists Respond to Incentives," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-28, April.
- Seabright, Paul, 2004.
"Continuous Preferences Can Cause Discontinuous Choices : an Application to the Impact of Incentives on Altruism,"
IDEI Working Papers
257, Institut d'Économie Industrielle (IDEI), Toulouse.
- Seabright, Paul, 2004. "Continuous Preferences Can Cause Discontinuous Choices: An Application to the Impact of Incentives on Altruism," CEPR Discussion Papers 4322, C.E.P.R. Discussion Papers.
- Armin Falk & Michael Kosfeld, "undated".
"The Hidden Costs of Control,"
IEW - Working Papers
250, Institute for Empirical Research in Economics - University of Zurich.
- Dirk Sliwka, 2007.
"Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes,"
American Economic Review,
American Economic Association, vol. 97(3), pages 999-1012, June.
- Sliwka, Dirk, 2006. "Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes," IZA Discussion Papers 2293, Institute for the Study of Labor (IZA).
- Donald Gerwin & Linda Moffat, 1997. "Withdrawal of Team Autonomy During Concurrent Engineering," Management Science, INFORMS, vol. 43(9), pages 1275-1287, September.
- Bruno S. Frey & Reto Jegen, 2000. "Motivation Crowding Theory: A Survey of Empirical Evidence," CESifo Working Paper Series 245, CESifo Group Munich.
- Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Oxford University Press, vol. 70(3), pages 489-520.
When requesting a correction, please mention this item's handle: RePEc:awi:wpaper:0457. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gabi Rauscher)
If references are entirely missing, you can add them using this form.