Dr. Exequiel Hernandez, from the Wharton School, will be giving a research talk entitled Consistently Mediocre: Modular Collaboration and Variance in Organizational Performance. The research seminar will take place on Friday, Feb 19 from 9:30 to 11:00. See abstract below.
ABSTRACT: Is modular collaboration good for organizational performance? Scholars have argued that it is, because it helps simplify coordination in the face of complexity and neutralizes the harm of unexpected shocks to production. But while there is wide agreement that modularity stabilizes the output of an organizational system, it is unclear whether modular collaboration stabilizes organizations into consistently good, bad, or mediocre performance. Further, research on the topic has not considered how modularity affects performance in a competitive context, where rivals can observe and react to the patterns of collaboration adopted by the focal organization. We address these issues by studying the performance of European football (soccer) clubs between 2010-2019. Using remarkably fine-grained data on millions of in-game instants and over 10,000 players in 171 teams, we can precisely measure the modularity of collaboration based on the passing networks among players and carefully capture performance at the individual, game, and season levels. We find that high modularity in collaboration is associated with lower variance in collective performance. We document that such stability is driven by a simple double-edged mechanism: modularity prevents negative shocks to individual productivity from harming the rest of the organization, per the canonical theory; but it likewise prevents the upsides of positive shocks to individual productivity from benefitting the rest of the organization. Crucially, we also find that modularity leads to lower average levels of performance. Modularity in collaboration thus seems to lock organizations into a pattern of "consistently mediocre" performance in competitive settings.
To access the event, click here.
For more information, contact: Pamela Costa at pamela.costa@uconn.edu