THE IMPACT OF PROBABILISTIC INFORMATION ON DECISION BEHAVIOR AND PERFORMANCE IN AN EXPERIMENTAL GAME

This research presents the results of a longitudinal experiment using experimental gaming. The results suggest that probabilistic information did change decision behavior and improve subject performance in the experiment. Moreover, there appeared to be a learning effect associated with the use of probabilistic information. Finally, the source of information (externally supplied by the researcher or generated by the subjects themselves) had an impact on decision behavior and performance in the experiment.     

AN ANALYSIS OF BEHAVIOR AND PERFORMANCE IN THE FOOD RETAILING INDUSTRY USING EXPERIMENTAL BUSINESS GAMING

This research tested hypotheses concerning the effects of organizational affiliation, differences among managers nested within organizational affiliation, degree of price competition and selected demographic and psychological traits of managers on economic behavior and performance. Experimental gaming in a behavioral science laboratory was used with a group of 60 subjects who were managers of Indiana supermarkets. The results support the influence of economic factors on the behavior and performance of managers. Degree of price competition imposed by the researchers significantly affected pricing decisions. At the same time, factors not usually considered in the static theory of the firm, such as organizational affiliation, had a significant influence on behavior and performance. While psychological and demographic traits generally did a poor job of explaining manager behavior, their effect may have been masked by the main treatments to which subjects were exposed. Realism in the experiment was not as high as expected, but the approach used was judged to be superior to alternative approaches.     

PERFORMANCE AND BEHAVIOR OF FAMILY FIRMS: EVIDENCE FROM THE FRENCH STOCK MARKET

This paper empirically documents the performance and behavior of family firms listed on the French stock exchange between 1994 and 2000. On the French stock market, approximately one third of the firms are widely held, whereas the remaining two thirds are family firms. We find that, in the cross‐section, family firms largely outperform widely held corporations. This result holds for founder‐controlled firms, professionally managed family firms, but more surprisingly also for firms run by descendants of the founder. We offer explanations for the good performance of family firms. First, we present evidence of a more efficient use of labor in heir‐managed firms. These firms pay lower wages, even allowing for skill and age structure. We also find that descendants smooth out industry shocks and manage to honor implicit labor contracts. Second, we present evidence consistent with outside CEOs in family firms making a more parsimonious use of capital. They employ more unskilled, cheap labor, use less capital, pay lower interest rates on debt and initiate more profitable acquisitions. (JEL: G32, L25, J31)     

PERFORMANCE DIFFERENCES IN THE USE OF GRAPHIC AND TABULAR DISPLAYS OF MULTIVARIATE DATA

It has been suggested that graphically displayed multivariate data help decision makers better understand information they are called on to analyze. This study compares judgments made from one recently suggested multivariate display technique with judgments made from traditional tabular displas of financial figures. Significant differences in task performance are found to be related both to differences in the stimulus sets and to individual differences among the subjects. Our results suggest that the relative contribution of graphic displays to decision making may vary considerably from situation to situation.     

POLITICAL SELECTION IN CHINA: THE COMPLEMENTARY ROLES OF CONNECTIONS AND PERFORMANCE

Who becomes a top politician in China? We focus on provincial leaders—a pool of candidates for top political office—and examine how their chances of promotion depend on their performance in office and connections with top politicians. Our empirical analysis, based on the curriculum vitae of Chinese politicians, shows that connections and performance are complements in the Chinese political selection process. This complementarity is stronger the younger provincial leaders are relative to their connected top leaders. To provide one plausible interpretation of these empirical findings, we propose a simple theory in which the complementarity arises because connections foster loyalty of junior officials to senior ones, thereby allowing incumbent top politicians to select competent provincial leaders without risking being ousted. Our findings shed some light on why a political system known for patronage can still select competent leaders.     

ORGANIZATIONAL CONTEXT,USER INVOLVEMENT,AND THE USEFULNESS OF INFORMATION SYSTEMS*

This study investigates organizational factors related to user involvement in information system development and perceived system usefulness. Using a sample of 118 usermanagers in 34 companies, the results show that user involvement in design and implementation is related positively to users' perceptions of system usefulness. However, organizational factors were not found to be related significantly to user involvement, as had been originally hypothesized. Rather, organizational factors either had a direct relationship with perceived usefulness or moderated the relationship between involvement and usefulness. Two factors reflecting an MIS department's maturity (size and age) were found to reduce users' perceptions of system usefulness. Also, users at higher levels and those making more structured decisions found their systems more useful, although the user's level was found to moderate perceptions of system usefulness during the design stage. Three other organizational factors (level of MIS manager, MIS department scope, and decentralization of authority) also were found to have moderating effects.     

BEHAVIORAL ANALYSIS AND ORGANIZATIONAL REALITY THE NEED FOR A TECHNOLOGY OF PROGRAM IMPLEMENTATION

No abstract available for this article.     

THE TRADEOFF BETWEEN PERFORMANCE AND QUITTING IN HIGH POWER TOURNAMENTS

Tournaments may be characterized by the performance they induce as well as by the rate of quitting and dropouts of participants. Although most of the attention in the literature is on the performance induced by high power incentives, there are many daily situations in which dropouts and quitting are a major concern. Using a field experiment in schools and a model of dynamic tournament we examine the effect of different levels of rewards on the rate of quitting. Our experiment indicates that there is a possible tradeoff between performance and quitting. Strong incentives tournaments induced participants to exert more effort and exhibit a better performance but, at the same time, it induces a higher rate of quitting. We present a multi‐stage tournament model that gives rise to a similar characterization.     

PROTESTANT RELATIONAL IDEOLOGY: THE COGNITIVE UNDERPINNINGS AND ORGANIZATIONAL IMPLICATIONS OF AN AMERICAN ANOMALY

Cross-national comparisons of relational work styles suggest that the United States is an anomaly in its low relational focus. This article describes Protestant Relational Ideology (PRI), a cultural construct that explains the origins and nature of this anomaly. This construct refers to a deep-seated belief that affective and relational concerns are considered inappropriate in work settings and, therefore, are to be given less attention than in social, non-work settings. Akin to an institutional imprinting perspective, a review of sociological and historical research links PRI to the beliefs and practices of the founding communities of American society. A social cognition perspective is used to explain the mechanisms through which PRI influences American relational workways. The article also describes a program of research that uses PRI to address a wider set of organizational behavior issues that include: antecedents of prejudice and discrimination in diverse organizations; sources of intercultural miscommunication; beliefs about team conflict; mental models of “professionalism” and its effect on organizational recruitment and selection.     

IMPACT OF PARTICIPATION IN THE BUDGETARY PROCESS ON MANAGERIAL ATTITUDES AND PERFORMANCE: UNIVERSALISTIC AND CONTINGENCY PERSPECTIVES*

Data from responsibility-center managers reveal that greater budgetary participation contributes to managerial performance and attitudes in high-environmental-uncertainty situations but hampers performance and attitudes in low-uncertainty situations. Higher budgetary participation reduces managers' propensity to create slack in high- (but not in low-) uncertainty conditions.     

SLOW INFORMATION DIFFUSION AND THE INERTIAL BEHAVIOR OF DURABLE CONSUMPTION

This paper studies the aggregate dynamics of durable and nondurable consumption under slow information diffusion (SID) due to noisy observations and learning within the permanent income hypothesis framework. We show that SID can significantly improve the model's predictions on the joint behavior of income, durable consumption, and nondurable consumption at the aggregate level. Specifically, we find that SID can significantly improve the model's predictions for: (i) smoothness in durable and nondurable consumption, (ii) autocorrelation of durable consumption, and (iii) contemporaneous correlation between durable and nondurable consumption.     

ON THE RELATIVE EFFICIENCY OF PERFORMANCE PAY AND NONCONTINGENT INCENTIVES

We report evidence from a large field experiment that compares the effectiveness of contingent and noncontingent incentives in eliciting costly effort for a large range of payment levels. The company with which we worked sent 7,250 letters asking customers to complete a survey. Some letters promised to pay amounts ranging from $1 to $30 upon compliance (contingent incentives), whereas others already contained the money in the request envelopes (noncontingent incentives). Compared to no payment, very small contingent payments lower the response rate while small noncontingent payments raise the response rate. As expected, response rates rise with the size of the incentive offered. The response rate in the noncontingent incentives rises more rapidly for low amounts of incentive, but then flattens out and reaches lower levels than under contingent payments. We discuss how the optimal policy regarding the use of each size and type of incentives crucially depends on firms’ objectives.     

PERFORMANCE OF THE EXPECTED UTILITY METHOD AND TWO OTHER NORMATIVE METHODS IN INSURANCE DECISION MAKING*

In an experiment, thirty-six professional insurance men employed the utility method, the worry method, and the comparison method in two insurance problems to determine the appropriate insurance coverage. It was found that the best act with the utility method almost always was no insurance, whereas the best act with the other two methods tended to be complete insurance. The utility method best act rarely agreed with the subject's actual preferred act, while the comparison method best act usually was the same or almost the same as the actual preferred act. While the worry method suggests that the subjects typically are risk averse, the utility functions obtained tend to show that the subjects typically are not risk averse.     

STRUCTURE,ENVIRONMENT, AND ORGANIZATIONAL GOVERNANCE IN MANUFACTURING*

The paper compares theories of organizational governance that explain delegation in decision making in terms of administrative rationality on the parts of top corporate officials with theories that emphasize lower-level actors mobilizing resources to gain control over organizational outcomes. These two alternative theories are developed and extended to apply to the relationship between manufacturing plants and parent companies. A general model is introduced to compare these theories which includes characteristics of parent companies and site environments, site resources, and delegation. The model is then tested on a sample of manufacturing plants.     

BUSINESS STRATEGY,MANUFACTURING FLEXIBILITY,AND ORGANIZATIONAL PERFORMANCE RELATIONSHIPS: A PATH ANALYSIS APPROACH

It has been argued in the literature that business strategy and manufacturing flexibility independently affect the performance of an organization. However, no empirical examination of the interrelationship among these three constructs has been performed. In this paper, based on a field study of 269 firms in the manufacturing industry, the identified constructs have been used to test a theoretical model using path analysis techniques. Our results indicate that business strategy contributes both directly and indirectly to organizational performance. The findings provide evidence of direct effects of (i) business strategy on manufacturing flexibility and (ii) manufacturing flexibility on organizational performance.     

MEASURING THE IMPACT OF GROUP PERFORMANCE FEEDBACK VERSUS INDIVIDUAL PERFORMANCE FEEDBACK IN AN INDUSTRIAL SETTING

No abstract available for this article.     

ORGANIZATIONAL CHOICE AND SOME CORRELATES OF INDIVIDUALS' EXPECTANCIES1

This study uses expectancy theory to predict the sorority choices of 121 undergraduate students. Results show that the complete, multiplicative expectancy model is only a slightly better predictor of choice behavior than other versions of the model. Several personal and situational correlates of individuals' expectancies of entering sororities also are examined. Results show significant relationships between expectancy and subjects' self-esteem, perception of value similarity with sorority members, and number of perceived friendships with sorority members.