Most of managerial theories are based on the assumption of Homo Economicus which
announces human nature is selfish. In contrast with this assumption, more and more
behavior researches suggest that substantial fraction of human beings exhibit
heterogeneity of individual preferences rather than “just selfish”. The inaccurate
assumption of individual preferences may lead to ineffective organizational design. The
objective of this paper is seeking to understand how the individual preferences
(selfishness, trusting, trustworthiness and interpersonal sensitivity) influence the
performances under different organizational designs (by two dimensions:
communications and incentives). Focusing on empirical data the paper finds that less
selfishness plays a significant role in increasing others members’ performances. Also,
interpersonal sensitivity has a tiny negative relationship with performance increased when the organizational design changes from non-communication to communication, as
well as controlling the incentive as individual-based pay. When the incentives are
changed from individual-based pay to group-based pay, holding the communication
environment fixed, the association between individual preferences and performances is
complicated; the empirical findings do not support strong statements concerning the
effects of incentives on performance.
University of Minnesota M.A. thesis. May 2011. Major: Human Resources and Industrial Relations. Advisor: Avner Ben-Ner. 1 computer file (PDF); vi, 44 pages, appendices 1-2.
Relationships between individual preferences and organizational designs: an experiment.
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