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Stories and Identity in Organizations

Paper Session

Saturday, Jan. 4, 2020 2:30 PM - 4:30 PM (PDT)

Marriott Marquis, Grand Ballroom 4
Hosted By: American Economic Association
  • Chair: Niko Matouschek, Northwestern University

Stories as Knowledge in Organizations

Robert Gibbons
,
Massachusetts Institute of Technology
Laurence Prusak
,
Columbia University

Abstract

Organizations are full of stories, but organizational economics is silent on the subject. To study stories in organizations, economists would need to define the term. We summarize definitions from other disciplines—including anthropology, communications, and more—and then propose a definition for organizational economics based on the related idea of knowledge in organizations. To motivate our definition, we begin by distinguishing data from information and then information from knowledge, and we then ask “If an organization knows something, where does that knowledge reside?” We propose that certain kinds of stories, told in public and with shared interpretation, are one answer to this question. Based on Geertz’s (1973: 12) dictum that “Culture is public because meaning is,” we then suggest that these kinds of stories are one way to capture and convey the kind of knowledge that underlies organizational culture.

Individual Identity and Organizational Attachment: Evidence from a Field Experiment

Maria Guadalupe
,
INSEAD
Zoe Kinias
,
INSEAD
Florian Schloderer
,
INSEAD

Abstract

This paper explores the relationship between individual identity (defined by personal values) and organizational attachment. Using individual data from employees at a large employer in the services sector with an internationally diverse workforce we show that, in the cross‐section, individuals who report a higher alignment to their individual (eudaimonic) values, are also more attached to the organization. But this could reflect a selection process by the firm, reverse causation or other mechanisms. So next, we run a field experiment where we make individual values salient (through a value affirmation) and assess how this changes alignment to the organization. We find that on average, making individual values salient reduces organizational attachment. In addition, this effect is heterogenous across individuals: those who were initially attached to the organization increase their attachment when their values are made salient, those who started off less identified with the organization reduce their attachment, and this result does not vary by other initial characteristics. Overall, the results illustrate the importance of heterogeneity and how individual identity/values and organizational attachment can conflict.

Stories at Work

Robert Akerlof
,
University of Warwick
Niko Matouschek
,
Northwestern University
Luis Rayo
,
Northwestern University

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.
JEL Classifications
  • D2 - Production and Organizations
  • L2 - Firm Objectives, Organization, and Behavior