Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/111213
Authors: 
Brandes, Leif
Darai, Donja
Year of Publication: 
2014
Series/Report no.: 
Working Paper Series, University of Zurich, Department of Economics 157
Abstract: 
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.
Subjects: 
communication procedures
non-instrumental-information
employee motivation
JEL: 
C92
D23
D83
M54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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