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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title The value of top-down communication for organizational performance
Organization Unit
  • Leif Brandes
  • Donja Darai
  • English
Institution University of Zurich
Series Name Working paper series / Department of Economics
Number 157
ISSN 1664-7041 (P) 1664-705X (E)
Number of Pages 36
Date 2014
Abstract Text We design a laboratory experiment to identify causal performance effects of top-down communication between managers and their subordinates. Our focus lies on communication that resolves uncertainty about the work environment but does not provide task-specific knowledge. Recent articles in the business press report a lack of such communication in real-world organizations and associate it with reduced organizational performance. Our results confirm this observation. We find that top-down communication is a profitable way for managers to increase employee performance in the presence of uncertainty. Specifically, we show that non-communication is the worst option for managers. However, 50 percent of our experimental managers use top-down communication too restrictively. Overall, managers forego 30 percent of their potential profits through non-communication. We show that organizations can overcome this problem by adopting automated information procedures, which are equally effective.
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Keywords Communication procedures, non-instrumental-information, employee motivation, Organisationstheorie, Organisation, Effizienz, Motivation