Speaker: Jordi Blanes i Vidal, LSE
Communication is integral to organisations, and yet field evidence on the relation between communication and worker productivity remains scarce. We argue that a corerole of communication is to transmit information that helps co-workers do their jobbetter. We build a simple model in which the optimal amount of communication trades-off this benefit against the time cost incurred by the sender, and use it to derive a set of empirical predictions. We then exploit a natural experiment in an organisation where problems arrive and must be sequentially dealt with by two workers. For exogenousreasons, the first worker can sometimes communicate face-to-face with their colleague. Consistently with the predictions of our model we find that: (a) the second worker works faster (at the cost of the first worker having less time to deal with incoming problems) when face-to-face communication is possible, (b) this effect is stronger when the second worker is inherently slower, busier, and dealing with more urgent tasks, and(c) the effect is also stronger for teams that are more homogenous and located closer to each other. Our findings illustrate how workers in teams adjust the amount of mutual communication to its costs and benefits.