Abstract This article investigates how the success of a management practice depends on the underlying values articulated by the management. A large U.S. transportation company is in the process of fitting its trucks with an electronic on-board recorder (EOBR) to provide drivers with information on their driving performance. The company also has commenced a multi-year initiative to remake its internal operations, the first phase of which focuses exclusively on changing values toward a greater emphasis on teamwork and empowerment. In this setting, a natural question is whether the optimal managerial practice consists of: (1) letting each driver know his or her individual performance only; or also (2) providing drivers with information about their performance with respect to other drivers. Using the EOBR-provided driver performance data, we randomize these practices across sites. The main result of our experiment is that (2) leads to better performance than (1) in a particular site if and only if the site has not yet received the values intervention, and worse performance if it has. The result is consistent with the presence of a conflict between competition-based managerial practices and a shift to a cooperation-based value system. More broadly, it highlights the role of intangible factors in determining the optimal set of managerial practices.

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.