John R. Hamman, Ph.D., Associate Professor of Economics at Florida State University, co-authored an article in the journal Organization Science titled “Managing Uncertainty: An Experiment on Delegation and Team Selection” with Miguel A. Martinez-Carrasco, Ph.D., Associate Professor at the University of the Andes. Below is a summary of the article written by doctoral student Martin Gandur (Ph.D. Political Science ’25).
In “Managing Uncertainty: An Experiment on Delegation and Team Selection,” John R. Hamman, Ph.D., and Miguel A. Martinez-Carrasco, Ph.D., examine how managers make decisions in the face of uncertainty.
Dr. Hamman and Dr. Martinez-Carrasco investigated how organizational structure decisions (i.e., how to allocate decision rights) and personnel decisions (i.e., team selection) jointly affect one another and influence managerial decisions and organizational performance in the face of environmental uncertainty.
To do so, the authors conducted a laboratory experiment that mirrored a managerial decision-making environment. Participants were grouped into teams of three and randomly assigned to the role of Manager, Worker 1, or Worker 2. Participants assigned to the manager role were tasked with selecting the skill heterogeneity of their workers, and whether to retain or delegate decision-making authority to their workers.
The authors unveil three major findings from their experiment. First, managers delegated decision-making authority to workers who they perceived as better-skilled when faced with higher levels of uncertainty. Second, deliberative thinking – the use of slower, more reflective cognition to reach conclusions – improved managerial decision-making under all levels of uncertainty. Finally, risk tolerance improved managerial decision-making in high-uncertainty scenarios, and helped managers optimally delegate tasks under all levels of uncertainty.
The results reiterate the challenging role of managers, who are faced with making organizational decisions under varied levels of uncertainty. At the same time, the results demonstrate that managers who practice deliberative thinking and risk tolerance can improve organizational performance.