Date of this Version
American Economic Review
Does the "soft side" of management matter? Many managers assert that "firm culture" is strongly correlated with productivity, but there are few robust tests of this assertion. In a set of field experiments, we study driver productivity within a large US logistics company that is arguably transitioning from one relational contract to another, while leaving formal practices and incentives unchanged. We find that sites under the new contract are associated with 1/8 percent higher productivity. Our findings suggest that relational contracts have a first-order effect on productivity and that they can be altered over time.
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Blader, S., Gartenberg, C. M., Henderson, R., & Prat, A. (2015). The Real Effects of Relational Contracts. American Economic Review, 105 (5), 452-456. http://dx.doi.org/10.1257/aer.p20151002
Date Posted: 19 February 2018
This document has been peer reviewed.
At the time of publication, author Rebecca Henderson was affiliated with Harvard University. Currently, she is a faculty member at the University of Pennsylvania.