Managerial Environment Concepts

Flashcards covering key concepts in team dynamics, decision-making, and group behavior in a managerial context.

Team Production

The process where workers collaborate in a group to achieve a common goal, which can complicate the assessment of individual contributions.

Free Riding

A situation where individuals rely on the efforts of others and do not contribute their fair share, resulting in less individual effort.

Yardstick Competition

A method of evaluation in which individual rewards are based on relative performance compared to peers, rather than absolute performance.

Information Cascade

A phenomenon where individuals base their decisions primarily on the actions of others, ignoring their own private information.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms, often involving the suppression of one’s own opinions.

Peer Pressure

Social influence exerted by one’s peers to encourage conformity to group norms or behaviors.

Externality

A side effect or consequence of an activity that affects other parties without being reflected in the costs of the goods or services involved.

Reputational Concern

The possibility that individuals will alter their opinions or decisions based on how they perceive the opinions of others in order to maintain their reputation.

What does it mean for workers to shirk?

To shirk means to avoid or neglect one's duties or responsibilities at work, often leading to lower productivity.

Why might workers shirk?

Workers might shirk due to lack of motivation, inadequate supervision, poor working conditions, or feeling underappreciated and undervalued.

what is a solution to team performance

Smaller groups
• Peer Pressure
• Monitoring
• Complementarities between team members

Issues with yardstick competition

Hinders teamwork
• Workers may sabotage one another
• Workers may collude
• Reduces incentives if skill differences are high

how to reduce free rider problem

Free riding is reduced in experiments when individual
performance is identifiable

when does information casecade happen

Decision are made sequentially
• Movers can see actions, but not information

ex. online recomendations , hiring