An Investigation into the Effect of Organisational Culture on Behaviour & Preferences
Behavioural and experimental economics has been successful in bringing fresh insights to mainstream economic theory. The literature has identified the (non-)existence of preferences that lie outside of the traditional model of economic man, and investigated the impact of immediate context on behaviour (Tversky & Kahneman, 1981; Zizzo, 2010). What is missing from a lot of the literature, however, is a satisfactory explanation of what mechanisms bring about these exotic preferences. Rather than only considering preferences as ex-ante determinants of career choice (the ‘mission-matching’ hypothesis), our research question concerns whether the culture of the organisation (the public sector) changes the preferences of recruits over time. In general terms, Oliver’s hypothesis is that preferences are not exogenous or individualistic but are in part learned in through organisational membership.The effect of ‘culture’ has been considered in literature on Political Economy and Economic History on a national level. We believe that Nunn’s (2012) notion of culture as “heuristics or ‘rules of thumb’ that have evolved given our need to make decisions in complex and uncertain environments” may be just as important at the level of the workplace as the nation. At the most basic level, individuals in different organisation are required to learn starkly contrasting skills and behaviours and interact with a variety of people in distinct ways (think of investors and teachers). Moreover, organisational characteristics may cause members of separate organisations to experience similar situations in contrasting ways. It is these rules, interacting with the responsibilities of the role, which generate ‘organisational culture’. Indeed, it is these “decision making heuristics or ‘rules of thumb’ that have evolved” (Nunn, 2012) within an organisation, and their effects on individual behaviour within the workplace and beyond, that the project is interested in.The project will begin by running experiments on students within different University departments. The idea is that students within different departments are like employees of different companies in that they have experiences that are unique to their course and/or department, and are also rewarded or punished for certain preferences in ways that will be peculiar to their own subject choice. Experiments would build on existing methodologies to elicit, for example, pro-social motivation (Banuri & Keefer, 2016) or tastes for risk (Eckel & Grossman, 2008). However, Oliver will run the experiments at intervals throughout the students’ academic progression. The data from treatment and control groups could then be fed into an econometric model which tests for significant changes in behaviour over time.
4 – Economics, Finance & the World Economy