Relevance of a Corporate Culture

Question 1

How can economic research questions be examined scientifically?

Answer 1

• theoretical analysis
  
  • > verbal analytical considerations (Überlegungen)
  • > microeconomic model (analysis via game and contract)
• empirical studies
  
  • > field data
  • > experiments
  • > case studies

Question 2

Field data

Answer 2

• measures in real companies examined with economic methods

- only a few data sets available for research

Question 3

Experiments

Answer 3

• extremely simplified abstract model of real situation

- many controllable factors

Question 4

case studies

Answer 4

• only descriptive
• usually only a single case
• develops a better understanding of the situation

Question 5

Field Data -> Random Data

Answer 5

• observed behavior of economic actors
• sources: e.g. Statistical Federal Office,…
• basis for many social and economic studies

Question 6

Field Data -> Experimental Data

Answer 6

Both field data and field experiments are often not ideal in order to cleanly examine interdependencies, because many influences cannot be controlled

Question 7

Laboratory Data -> Experimental Data

Answer 7

• random assignment of participants to treatment groups and control groups
  -> no self selection possible
  -> treatment and control group equal in all aspects
  => causal effect can now be determined
  => reduction of self-selection biases etc.

Question 8

Treatment effect

Answer 8

• Change one variable (treatment variable) and keep everything else constant
• > Differences in the behavior can now be traced back to that single variable

Question 9

Control in Experiments

Answer 9

• equal conditions for all participants (experimenter, instructions, computer, room, time, temperature,…)
• control of preferences via monetary incentives
• constant procedure -> replicability possible
• control of participants
• control and design of the language (Framing)
• measurement of the actual decisions

Question 10

Cultural Conflict and merger failure (Fusionsversagen)

Weber, R.A. und C. Camerer 2003

Answer 10

• participants receive 16 different pictures of offices
• pictures must be described verbally to the teammate
• the teammate has to identify the correct picture
• participants receive wage depending on speed
  The Merger
• one manager stays and describes the picture to two employees: one of them is new
• 20 rounds before merger and 10 rounds in new groups of three after the merger

Question 11

Results experiment

Answer 11

• performance is more often significantly lower than higher after the merger
• only the first round the new (transferred) employee is significantly worse compared to the other employee
• after 10 rounds its more or less equal than before the merger
• control groups with 3 person before the merger -> lower output is not the result from increasing group size

Question 12

Results beliefs and questionnaire

Answer 12

• too optimistic estimates regarding the performance after the merger
• difficulty of a merger is underestimated
• difficulties are rather assigned (zugewiesen) to the competencies of the new employees than to the situation

Question 13

Opportunities Corporate Culture

Answer 13

• easier communication -> higher efficiency/productivity
• motivation may be better -> identification
• decision making is easier -> reduce uncertainty (Unsicherheit)
• less monitoring + incentive schemes are necessary

Question 14

Threats Corporate Culture

Answer 14

• exclusion of new hires
• onboarding is much more difficult/ takes more time
• inflexibility
• values/ norms are not in line with performance goals (slow, skeptical could be a problem)