Acquiring Knowledge Within and Across Firm Boundaries: Evidence from Clinical Development

Considerable evidence suggests that information is acquired more easily within than across firm boundaries. I explore why this is observed in the setting of clinical development. Since the mid-1980s, pharmaceutical firms have partly contracted out the operational aspects of clinical trials to Contract Research Organizations (CROs). Using detailed project-level data for 53 firms, I document that even after controlling for a number of alternative explanations, knowledge-intensive projects are more likely to be assigned to internal teams, while data-intensive projects are more likely to be outsourced. The statistical exercise is complemented by in-depth interviews with six pharmaceutical and biotechnology firms. The qualitative evidence confirms that incentives for knowledge and data production are more easily kept in balance in the firm's own internal labor market than in that of its suppliers. Moreover, firms use relational contracts to ensure that their employees' incentives are both balanced and relatively high-powered.

Hidden Benefits of Reward: A Field Experiment on Motivation and Monetary Incentives

We conducted a field experiment in a controlled work environment to investigate the effect of motivational talk and its interaction with monetary incentives. We find that motivational talk significantly improves performance only when accompanied by performance pay. Moreover, performance pay slightly reduces performance unless it is accompanied by motivational talk. These effects also carry over to the quality of work. Performance pay alone leads to more mistakes. Adding motivational talk makes the difference. In treatments with performance pay, motivational talk increases output by about 20 percent and reduces the ratio of mistakes by more than 40 percent

Uptake of BIM and IPD within the UK AEC Industry: the evolving role of the architectural technologist

Building Information Modelling is not only a tool, but also the process of creation, maintenance, distribution and co-ordination of an integrated database that collaboratively stores 2D and 3D information, with embedded physical and functional data within a project-building model. The uptake of BIM within the UK Architecture, Engineering and Construction (AEC) industry has been slow since the 1980’s, but over recent years, adoptions have increased. The increased collaborative nature of BIM, external data sharing techniques and progressively complex building design, promotes requirements for design teams to coordinate and communicate more effectively to achieve project goals. To manage this collaboration, new or evolved job roles may emerge. This research examined the current use of BIM, Integrated Project Delivery (IPD) and collaborative working in the UK AEC industry and job roles that have evolved or been created to cater for them. Using semi-structured interviews the interviewees indicated while several of the key enablers of IPD were being used, IPD itself had not been fully adopted. BIM was being used with some success but improvements could be made. New job roles such as the BIM Engineer and BIM Coordinator had been seen in the industry and evidence that the Architectural Technologist (AT) role is evolving into a more multidisciplinary role; this reflects similar findings of recent research

Subjective Evaluation of Performance Through Individual Evaluation Interview: Empirical evidence from France

Individual evaluation interviews have become a widespread practice. 52% of employees in French manufacturing firms over 50 employees declared an annual individual evaluation interview in 1997. However whereas the problem of constructing an optimal contract with subjective evaluation (which is defined simply as a signal in most papers) receives a large attention, firm-level evaluation interviews are strikingly left aside from economic analysis. This paper aims at identifying the underlying logics of individual evaluation interviews in the case of individual production and of team production. Especially, it aims at analyzing the relationships between effort, wage distribution within the firms and individual evaluation interviews. From a theoretical standpoint, three papers by Alchian and Demsetz (1972), by Che and Yoo (2001) and by MacLeod (2003) are closely related to our paper and from an empirical point of view, a paper by Engellandt and Riphahn (2004). Our theoretical analysis allows to derive testable predictions regarding the effect of individual evaluation interviews on productive and cognitive effort, on work overload and on wage setting. Using a matched employer / employee survey on computerisation and organisational change (COI), we are able to test part of these predictions and to corroborate them. First, evaluation interviews have a positive impact on productive and cognitive effort. Second, evaluation interviews increase effort through two effects: the classical incentive effect and also a selection effect. Third, the selection effect is stronger in the case of individual production compared with the case of team production. Fourth, evaluated employees earn more than employees in a classical incentive scheme and fifth, evaluated workers have a better knowledge of the rules driving wage setting.

ECONOMICS OF INNOVATION The Effects of Prize Structures on Innovative Performance

Successful innovation is essential for the survival and growth of organizations, but how best to incentivize innovation is poorly understood. We compare how two common incentive schemes affect innovative performance in a field experiment run in partnership with a large life sciences company. We find that a winner-takes-all compensation scheme generates significantly more novel innovation relative to a compensation scheme that offers the same total compensation but shares it across the ten best innovations. Moreover, the winner-takes-all scheme does not reduce innovative output on average and, among teams of innovators, generates more output than the less risky prize structure

Subjective evaluation of performance through individual evaluation interview : theory and empirical evidence from France

Individual evaluation interviews have become a widespread practice. 52 % of employees in French manufacturing firms over 50 employees declared an annual individual evaluation interview in 1997. However whereas the problem of constructing an optimal contract with subjective evaluation (which is defined simply as a signal in most papers) receives a large attention, firm-level evaluation interviews are strikingly left aside from economic analysis. This paper aims at identifying the underlying logics of individual evaluation interviews in the case of individual production and of team production. Especially, it aims at analyzing the relationships between effort, wage distribution within the firms and individual evaluation interviews. From a theoretical standpoint, three papers by Alchian and Demsetz (1972), by Che and Yoo (2001) and by MacLeod (2003) are closely related to our paper and from an empirical point of view, a recent paper by Engellandt and Riphahn (2004). We test in our paper four predictions. First, evaluation interviews have a positive impact on effort. Second, evaluation interviews increase the effort through twoeffects : the classical incentive effect and also a high selection effect. Third, evaluation interviews are associated with positive beliefs regarding wage and work recognition. Finally, evaluation interviews are associated with monetary gains for employees. These predictions are tested using a matched employer/employee survey on Computerization and Organizational Change (survey «Changements Organisationnels et Informatisation», C.O.I.), conducted in 1997 over a sample of about 4 000 firms and 9 000 employees.Subjective evaluation, Principal-Agent model, personnel economics, super-modularity.