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NextGen Magazine


Study: Entrepreneurs From Less Open Countries Give Workers Less Autonomy in Their Firms

Chris Gaetano
Published Date:
Sep 9, 2019

A recent study using data from an online video game where players independently form companies has found that founders from countries with less transparent public institutions tend to have more rigid hierarchies with less autonomy for their workers, according to the Harvard Business Review

The study used data from the online video game EVE Online. For those not familiar, it's a massive multiplayer online role-playing game (MMORPG) with hundreds of thousands of players. The game, where players take the role of spaceship captains in a vast open galaxy, grants a large degree of freedom to shape the terms of the world, unlike other games that have static factions and classes premade by the creators. One consequence of this freedom has been the rise of literally hundreds of thousands of player-generated corporations with their own staff, internal policies, and assets (usually in the form of fleets of giant battleships that can cost thousands of real-world dollars each—one particularly destructive war was estimated to have destroyed $300,000 in real money). Corporations are formed for a wide variety of purposes: Some are mercenary squads that hire themselves out to other players, some are pure explorers, some run search-and-rescue operations, some operate as basically pirate companies, some specialize in espionage, and many more do something else entirely, as none of these purposes are predetermined by the game, with all organizations emerging organically from players themselves. Those who value their free time are generally recommended against getting into this game. 

The researchers studied a sample of 310,652 player-generated corporations founded by people across 124 countries. Each country of origin was scored for the transparency and predictability of its public institutions using metrics established by previous studies. What they found was that founders from countries that rate low on transparency and predictability in their home countries allowed their employees less autonomy and, conversely, those from countries with higher rated public institutions tended to gave them more. For instance, the 26,000 EVE corporations from Germany had the highest level of employee autonomy, while the 34,000 from Russia had the lowest. 

The researchers thought that the online game was a good environment to study the effect of a founder's country of origin on how they run their organizations, as it allowed them to separate the effects of being from that country from being in that country; in other words, seeing how, for instance, the state of being Japanese effected players' choices, separately from the state of being in Japan.