Two essays on organizational economics in China

Abstract

While organizational theories have yielded a series of powerful testable implications for intraorganizational cooperation and communication. Most of these theoretical predictions have not been empirically tested by large-scale observational studies due to the lack of data. To fill this literature gap, by utilizing a unique worker behaviours dataset from a mid-sized manufacturer, my thesis studies internal communication and cooperation among knowledge workers. The first chapter estimates how organizational structure affects knowledge workers’ cooperative behaviours With a unique dataset that records detailed employee behaviours, this chapter presents evidence from a midsize Chinese manufacturer on how knowledge workers’ behaviours, particularly cooperative behaviours, responded to an organizational reform that shifted the structure at the R&D division from the product-based to the function-based organization. Using the standard Difference-in-Differences method, we find a significantly and substantially increase in the total cooperative hours as a result of the organizational change. Then we further explore the effects on various types of intra-organizational cooperations, employee behaviours, and worker productivity. My findings reveal that the function-based structure facilities both intra- and inter-departmental cooperation, spurs inter-class cooperation, and increases cooperation with subordinates. All of these influences are statistically significant, economically large, and long-lasting. Furthermore, we also find that the organizational reform dramatically increases work hours on communication-related behaviours, and significantly decreases the likelihood of project delay. The second chapter studies how the COVID-19 pandemic affects employee’s online communication. The unprecedented COVID-19 and subsequent lockdowns have not only disrupted the way organizations function but also changed the patterns of organizational communication. This chapter explores the impacts of the pandemic on employee’s online communication based on a unique dataset that records detailed employee behaviours from a midsize Chinese manufacturer. By using the Difference-in-Differences approach with the treatment intensity, we find that the COVID-19 pandemic significantly increases the ratio of hours on online communication to the total hours on communication for departments with more intensive business trips before the pandemic. Then we further explore the effects on various types of online communication and employee behaviours. My findings indicate that the pandemic increases individual work hours on remote communication within a department rather than between departments, shifts individual work hours on online communication from inter-class to intra-class, and boosts distant communication with peers and superiors. Moreover, our social network analysis shows that the pandemic spurs communication more sufficiently within the organization. This chapter contributes to empirical studies on organizational communication in response to the pandemic and provides strong implications for the technology company in the face of the public health crisis.