The Contingent Effect of Management Practices

Steven Blader, Claudine Madras Gartenberg, Andrea Prat
2015 Social Science Research Network  
This paper investigates how the success of a management practice depends on the nature of the long-term relationship between the ...rm and its employees. A large US transportation company is in the process of ...tting its trucks with an electronic on-board recorder (EOBR), which provide drivers with information on their driving performance. In this setting, a natural question is whether the optimal managerial practice consists of: (1) Letting each driver know his or her individual performance
more » ... ly; or (2) Also providing drivers with information about their ranking with respect to other drivers. The company is also in the ...rst phase of a multi-year 'lean-management journey', which corresponds to an overhaul of the relational contract with its employees. This phase focuses exclusively on changing employee values, mainly toward a greater emphasis on teamwork and empowerment. The main result of our randomized experiment is that (2) leads to better performance than (1) in a particular site if and only if the site has not yet received the values intervention, and worse performance if it has. The result is consistent with the presence of a con ‡ict between competition-based managerial practices and a cooperationbased relational contract. More broadly, it highlights the role of intangible relational factors in We are particularly indebted to Rebecca Henderson who has provided extensive support and advice during this ongoing research program and of course to our partner company for their collaboration. We would also like to thank
doi:10.2139/ssrn.2594258 fatcat:2z53tbtjqrgpzbgwuobkipb6d4