Team Governance: Empowerment or Hierarchical Control

42 Pages Posted: 26 Nov 2007

See all articles by Guido Friebel

Guido Friebel

Goethe University Frankfurt; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Wendelin Schnedler

University of Paderborn - Department of Management; IZA Institute of Labor Economics; University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO)

Multiple version iconThere are 2 versions of this paper

Date Written: November 2007

Abstract

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.

Keywords: team work, incentives, informed principal, intrinsic motivation

JEL Classification: M54, D86

Suggested Citation

Friebel, Guido and Schnedler, Wendelin, Team Governance: Empowerment or Hierarchical Control (November 2007). IZA Discussion Paper No. 3143, Available at SSRN: https://ssrn.com/abstract=1032583

Guido Friebel

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Wendelin Schnedler (Contact Author)

University of Paderborn - Department of Management ( email )

Warburger Str. 100
D-33098 Paderborn
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO) ( email )

12 Priory Road
Bristol BS8 1TN
United Kingdom

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