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Personal Relations and their Effect on Behavior in an Organizational Setting: An Experimental Study

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  • Jordi Brandts
  • Carles Solà

Abstract

We study how personal relations affect performance in organizations. In the game we use amanager has to assign different degrees of decision power to two employees, who then have to make decisions which affect the manager. Our evidence shows that managers favor employees that they personally know and that these employees favor the manager in their decisions. However, this behavior does not affect the performance of the employees that do not know the manager. These effects are independent of whether the employees that know the manager are more or less productive than those who do not know the manager.

Suggested Citation

  • Jordi Brandts & Carles Solà, 2009. "Personal Relations and their Effect on Behavior in an Organizational Setting: An Experimental Study," Post-Print hal-00735846, HAL.
    • Handle: RePEc:hal:journl:hal-00735846
    DOI: 10.1016/j.jebo.2009.09.005
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    Cited by:

    1. Natalia Montinari & Antonio Nicolò & Regine Oexl, 2016. "The gift of being chosen," Experimental Economics, Springer;Economic Science Association, vol. 19(2), pages 460-479, June.
    2. Agnieszka Rusinowska & Vassili Vergopoulos, 2020. "Ingratiation and Favoritism in Organizations," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 176(3), pages 413-445.
    3. Robin, Stéphane & Rusinowska, Agnieszka & Villeval, Marie Claire, 2014. "Ingratiation: Experimental evidence," European Economic Review, Elsevier, vol. 66(C), pages 16-38.
    4. Jiang, Jiang & Li, Sherry Xin, 2019. "Group identity and partnership," Journal of Economic Behavior & Organization, Elsevier, vol. 160(C), pages 202-213.
    5. Hammermann, Andrea & Mohnen, Alwine & Nieken, Petra, 2012. "Whom to Choose as a Team Mate? A Lab Experiment about In-Group Favouritism," IZA Discussion Papers 6286, Institute of Labor Economics (IZA).
    6. Saima Naeem & Asad Zaman, 2013. "For Love or Money? Motivating Workers," PIDE-Working Papers 2013:90, Pakistan Institute of Development Economics.
    7. Sheheryar Banuri & Catherine Eckel & Rick K. Wilson, 2022. "Does cronyism pay? Costly ingroup favoritism in the lab," Economic Inquiry, Western Economic Association International, vol. 60(3), pages 1092-1110, July.
    8. Gabriele Chierchia & Fabio Tufano & Giorgio Coricelli, 2020. "The differential impact of friendship on cooperative and competitive coordination," Theory and Decision, Springer, vol. 89(4), pages 423-452, November.
    9. Angelovski, Andrej & Brandts, Jordi & Sola, Carles, 2016. "Hiring and escalation bias in subjective performance evaluations: A laboratory experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 121(C), pages 114-129.
    10. Li, Sherry Xin & Wang, Shengzhe & Yang, Shuo, 2023. "What is in Local Dialects? A Field Experiment on Social Distance and Human Capital Development in Job Training," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 106(C).
    11. Banuri, Sheheryar & Eckel, Catherine, 2012. "Experiments in culture and corruption : a review," Policy Research Working Paper Series 6064, The World Bank.
    12. Glenn Dutcher, 2011. "How does the social distance between an employee and a manager affect employee competition for a reward?," Working Papers 2011-29, Faculty of Economics and Statistics, Universität Innsbruck.
    13. Dimant, Eugen, 2015. "On Peer Effects: Behavioral Contagion of (Un)Ethical Behavior and the Role of Social Identity," MPRA Paper 68732, University Library of Munich, Germany.
    14. Alistair Munro, 2018. "Intra†Household Experiments: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 134-175, February.
    15. Abeler, Johannes & Altmann, Steffen & Goerg, Sebastian J. & Kube, Sebastian & Wibral, Matthias, 2011. "Equity and Efficiency in Multi-Worker Firms: Insights from Experimental Economics," IZA Discussion Papers 5727, Institute of Labor Economics (IZA).
    16. Tom Lane, 2015. "Discrimination in the laboratory: a meta-analysis," Discussion Papers 2015-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

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    More about this item

    Keywords

    C92; D23; M50; Family firms; favoritism; corporate governance; procedural fairness; experiments;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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