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  3. American Economic Review
  4. December 2010
  5. Organizational Structure, Communication, and Group Ethics

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Organizational Structure, Communication, and Group Ethics

  • Matthew Ellman
  • Paul Pezanis-Christou
American Economic Review
vol. 100, no. 5, December 2010
(pp. 2478–91)
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Abstract

This paper investigates experimentally how a group's structure affects its ethical behavior towards a passive outsider. We analyze one vertical and two horizontal structures (one requiring consensus, one implementing a compromise by averaging proposals). We also control for internal communication. The data support our main predictions: (1) horizontal, averaging structures are more ethical than vertical structures (where subordinates do not feel responsible) and than consensual structures (where responsibility is dynamically diffused); (2) communication makes vertical structures more ethical (subordinates with voice feel responsible); (3) with communication, vertical structures are more ethical than consensual structures (where in-group bias hurts the outsider). (JEL C92, D23, L21, M14)

Citation

Ellman, Matthew, and Paul Pezanis-Christou. 2010. "Organizational Structure, Communication, and Group Ethics." American Economic Review 100 (5): 2478–91. DOI: 10.1257/aer.100.5.2478

Additional Materials

JEL Classification

  • C92 Design of Experiments: Laboratory, Group Behavior
  • D23 Organizational Behavior; Transaction Costs; Property Rights
  • L21 Business Objectives of the Firm
  • M14 Corporate Culture; Social Responsibility