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Stories at Work

Author

Listed:
  • Robert Akerlof
  • Niko Matouschek
  • Luis Rayo

Abstract

Organizational stories are commonplace and a crucial force shaping employee behavior. We show how an organization's choice of story can be formally incorporated into its design problem. In our simple model, the organization optimally becomes either "purpose driven," which involves pairing flat money incentives with a story that emphasizes the importance of generating output (e.g., saving lives, putting a person on the moon), or "incentive driven," which involves pairing steep money incentives with a narrower story that emphasizes the importance of maintaining ethical standards (e.g., maintaining quality, helping peers). We illustrate the applicability of these results using a variety of examples.

Suggested Citation

  • Robert Akerlof & Niko Matouschek & Luis Rayo, 2020. "Stories at Work," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 199-204, May.
    • Handle: RePEc:aea:apandp:v:110:y:2020:p:199-204
    DOI: 10.1257/pandp.20201093
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    Citations

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    Cited by:

    1. Elliott, M. & Golub, B. & Leduc, M. V., 2023. "Corporate Culture and Organizational Fragility," Cambridge Working Papers in Economics 2314, Faculty of Economics, University of Cambridge.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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