Face-to-Face Communication in Organizations

• Published in: The Review of economic studies 2021-03, Vol.88 (2 (319)), p.574-609
• Main Authors: BATTISTON, DIEGO, VIDAL, JORDI BLANES I, KIRCHMAIER, TOM
• Format: Article
• Language: English
• ISSN: 0034-6527; 1467-937X
• DOI: 10.1093/restud/rdaa060

Communication is integral to organizations and yet field evidence on the relation between communication and worker productivity remains scarce. We argue that a core role of communication is to transmit information that helps co-workers do their job better. We build a simple model in which workers choose the amount of communication by trading 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 organization where problems arrive and must be sequentially dealt with by two workers. For exogenous reasons, the first worker can sometimes communicate face-to-face with their colleague. Consistently with the predictions of our model, we find that: (1) 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, (2) this effect is stronger when the second worker is busier and for homogenous and closely located teams, and (3) the (career) incentives of workers determine how much they communicate with their colleagues. We also find that workers partially internalise social outcomes in their communication decisions. Our findings illustrate how workers in teams adjust the amount of mutual communication to its costs and benefits.