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Organizational Structure, Communication, and Group Ethics

Matthew Ellman () and Paul Pezanis-Christou ()

American Economic Review, 2010, vol. 100, issue 5, 2478-91

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)

Date: 2010
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Working Paper: Organisational structure, communication and group ethics (2007) Downloads
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