Companies these days strive to be learning organizations, where everyone is developing their knowledge and abilities.
Firms also usually try to delegate decision-making down through the ranks. But a recent study suggests those goals can be hampered by tight monitoring of the decisions made by individuals in subordinate roles.
Three academics - Dennis Campbell and Asis Martinez-Jerez of Harvard Business School, and Marc Epstein of Rice University - studied casinos in the MGM-Mirage group. They looked at the casino hosts, who have the discretion to give gamblers free suites, complimentary tickets and other perks. They are free to choose the comps, using the general guidelines that their value should not exceed 40 per cent of the customer's theoretical winnings. If the value of the perks goes higher than that, the casino hosts must file "exception reports" to their bosses.
The researchers found that, in tightly monitored situations, the hosts are less likely to experiment and offer perks, thus reducing their chances of learning from the experience and becoming better at the job.