The Breakdown and Recovery of Cooperation in Large Groups: Exploring the Role of Formal Structure Using a Field Experiment

Subject

Strategy and Entrepreneurship

Publishing details

Working Paper

Authors / Editors

Brahm F; Loch C; Riquelme C

Biographies

Publication Year

2020

Abstract

Cooperation among employees is crucial for the success of organizations but can unravel with size. We study cooperation in the context of a workplace safety methodology: workers are voluntarily enrolled and are trained to provide advice to co-workers on safe behavior. Using archival data, we show that while cooperation is useful in reducing accidents, it breaks down as the number of enrolled workers increase. We show that this is due to decreasing marginal rewards for the additional enrolled worker. This supports recent research that highlights the crucial role of marginal benefits in shaping the relationship between cooperation and size. Then, we manipulate the safety methodology in a field experiment by randomly structuring workers in groups. This produces a recovery of cooperative effort and a reduction in risky behavior and accidents. We show that the likely mechanism behind this recovery are repeated interactions among advisors and workers, rather than group identity or social control such as peer pressure or reputation. This result suggests that the core function of structure is not only grouping workers to favor the division of specialized labor –as emphasized in prior research–, but also to promote cooperation at scale.

Keywords

Cooperation; Field experiment; Formal structure; Repeated interactions; Identity; Reputation; Workplace safety

Series

Working Paper