The Real Effects of Relational Contracts
Steven Blader, Claudine Gartenberg, Rebecca Henderson, Andrea Prat
American Economic Review · 2015 · Volume 105 · Issue 5
Abstract
Does the "soft side" of management matter? Many managers assert that "firm culture" is strongly correlated with productivity, but there are few robust tests of this assertion. In a set of field experiments, we study driver productivity within a large US logistics company that is arguably transitioning from one relational contract to another, while leaving formal practices and incentives unchanged. We find that sites under the new contract are associated with 1/8 percent higher productivity. Our findings suggest that relational contracts have a first-order effect on productivity and that they can be altered over time.
Keywords
Production, Cost, Capital, Total Factor, and Multifactor Productivity, Capacity, Economics of Contract: Theory, Railroads and Other Surface Transportation, Personnel Management, Executives, Executive Compensation, Corporate Culture, Diversity, Social Responsibility, Personnel Economics: Labor Management
Enable JavaScript for citation tools and additional paper interactions.