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Information, Technology, and Information Worker

Productivity
Sinan Aral, Erik Brynjolfsson, Marshall Van Alstyne,
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Sinan Aral, Erik Brynjolfsson, Marshall Van Alstyne, (2012) Information, Technology, and Information Worker Productivity.
Information Systems Research 23(3-part-2):849-867. https://doi.org/10.1287/isre.1110.0408
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Information Systems Research
Vol. 23, No. 3, Part 2 of 2, September 2012, pp. 849–867
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© 2012 INFORMS
Information, Technology, and Information

Worker Productivity
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Sinan Aral
Stern School of Business, New York University, New York, New York 10012, sinan@stern.nyu.edu
Erik Brynjolfsson
Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142,
erikb@mit.edu
Marshall Van Alstyne
Boston University, Boston, Massachusetts 02215; and
Massachusetts Institute of Technology, Cambridge, Massachusetts 02142, mva@bu.edu
W e econometrically evaluate information worker productivity at a midsize executive recruiting firm and
assess whether the knowledge that workers accessed through their electronic communication networks
enabled them to multitask more productively. We estimate dynamic panel data models of multitasking, knowl-
edge networks, and productivity using several types of micro-level data: (a) direct observation of more than
125,000 email messages over a period of 10 months; (b) detailed accounting data on individuals’ project output
and team membership for more than 1,300 projects spanning five years; and (c) survey and interview data about
the same workers’ IT skills, IT use, and information sharing. We find that (1) more multitasking is associated
with more project output, but diminishing marginal returns, and (2) recruiters whose network contacts have
heterogeneous knowledge—an even distribution of expertise over many project types—are less productive on
average but more productive when juggling diverse multitasking portfolios. These results show how multitask-
ing affects productivity and how knowledge networks, enabled by IT, can improve worker performance. The
methods developed can be replicated in other settings, opening new frontiers for research on social networks
and IT value.
Key words: social networks; productivity; information worker; IT; multitasking; dynamic panel data;
system GMM
History: Anitesh Barua, Senior Editor; Anandasivam Gopal, Associate Editor. This paper was received on
November 25, 2009, and was with the authors 9 months for 2 revisions. Published online in Articles in
Advance March 12, 2012.
In the physical sciences, when errors of measure- to measure. Yet as the information content of work
ment and other noise are found to be of the same increases, measuring information worker productivity
order of magnitude as the phenomena under study, becomes even more critical to our ability to manage
the response is not to try to squeeze more informa- individual, group, and firm performance.
tion out of the data by statistical means; it is instead One of the most hotly debated issues in the design
to find techniques for observing the phenomena at a
and management of information work is the produc-
higher level of resolution. The corresponding strategy
tivity effect of multitasking—the act of taking on mul-
for [social science] is obvious: to secure new kinds of
data at the micro level.
tiple projects or tasks simultaneously (Appelbaum
—Herbert Simon et al. 2008).1 Over the last several decades mul-
titasking has increased in a variety of industries
(Spink et al. 2008) and speculation about its pro-
1. Introduction ductivity effects has attracted the attention of man-
Information workers now account for as much as 70% agers, academics, and the media (Coviello et al.
of the U.S. labor force and contribute more than 60% 2010). Some claim that multitasking increases produc-
of the total valued added in the U.S. economy (Apte tivity by enabling workers to smooth bursty work
and Nath 2004). Ironically, as more and more work- requirements, realize complementarities across tasks,
ers focus on processing information, researchers have
less and less information about how these workers 1
We distinguish between multitasking (taking on multiple simulta-
create value. Unlike bushels of wheat or tons of steel, neous projects) and switching between micro tasks such as reading
the output of most information workers is difficult email while talking on the phone. We focus on the former.
849
Aral, Brynjolfsson, and Van Alstyne: Information, Technology, and Information Worker Productivity
850 Information Systems Research 23(3, Part 2 of 2), pp. 849–867, © 2012 INFORMS
and incorporate relevant information from one task with diminishing marginal returns. At low levels of
into decision making on other tasks (Lindbeck and multitasking, taking on more work enables work-
Snower 2000). Others claim, however, that multi- ers to complete more work per unit time. However,
tasking creates confusion, distraction, and cognitive multitasking also increases the time it takes to com-
switching costs that reduce workers’ intelligence quo- plete each project on average, creating diminishing
tient (IQ) and their ability to complete tasks efficiently returns. This argument is robust to several alternative
(Rubenstein et al. 2001, Rosen 2008). One recent sur- explanations.
vey conducted by an IT-market research firm claims Second, multitasking performance improves with
that multitasking is costing the U.S. economy as much access to heterogeneous knowledge made available
as “$650 billion a year in lost productivity” (Rosen through IT-enabled networks. There is conflicting evi-
2008, p. 106). Unfortunately, little detailed empirical dence on the value of knowledge heterogeneity and
evidence on multitasking and productivity exists to diversity (Pelled et al. 1999). Some argue that access
adjudicate these claims. to diverse perspectives improves problem solving and
The rise of multitasking has been accompanied creativity (Burt 2004). Others contend that networks
by a simultaneous increase in the flow of informa- connecting people with heterogeneous knowledge are
tion through communication networks enabled by costly to maintain (Rodan and Galunic 2004) and that
information technology (IT). Email and other tech- processing heterogeneous knowledge is more difficult
nologies support the rapid dissemination of knowl-
(Reagans and McEvily 2003). The benefits of access to
edge and information through organizations and are
knowledge heterogeneity have been found to be worth
thought to complement systems of organizational
their costs in the context of innovation (Hargadon and
practices including decentralized decision making,
Sutton 1997). We find the same is true when workers
job rotation, and multitasking (Bresnahan et al. 2002,
are engaged in heterogeneous multitasking—the act
Brynjolfssonand Milgrom 2011). IT-enabled communi-
of taking on multiple dissimilar tasks simultaneously.
cation networks are specifically hypothesized to sup-
In our setting, recruiters with network contacts who
port “multitask learning,” the process of applying
information and knowledge from one task to improve have heterogeneous knowledge are less productive on
performance in another (Lindbeck and Snower 2000). average, but more productive when juggling diverse
Efficient access to useful information should increase multitasking portfolios. This implies that although
productivity by facilitating faster, higher quality deci- heterogeneous knowledge accessed through email
sions and enabling workers to utilize information contacts is costly to process and maintain, it improves
and skill complementarities between tasks to multi- the productivity of workers who are responsible for
task more productively (Lindbeck and Snower 1996). diverse tasks.
However, the relationship between information flow Our work has implications for managers respon-
in networks and multitasking has never been exam- sible for the productivity of information workers. In
ined. We therefore econometrically evaluated the particular, the concavity of the relationship between
effect of multitasking on information worker produc- multitasking and productivity implies that optimal
tivity and assessed whether the knowledge that work- levels of multitasking could be identified and adhered
ers accessed through their communication networks to in different information work settings. Further-
enabled them to multitask more productively. more, IT investments can be made more productive
We analyzed empirical evidence on multitasking, by encouraging contact between dissimilar employ-
email networks, and output for employees at a mid- ees who juggle diverse multitasking portfolios while
size executive recruiting firm. Accounting records encouraging domain specific communication between
provided data on individual level output, project start specialists. Our research approach also opens a path
and end dates, the number of concurrent projects, and to studying information flows inside firms and pro-
individual effort devoted to each project. With com- vides a proof-of-concept for using email data com-
pany and employee cooperation, we also monitored bined with individual productivity data to explore
email usage to analyze the firm’s communication net- relationships between work practices, networks, and
work, conducted field interviews, gathered survey productivity at the individual level.
data, and collected independent third party evidence
of project difficulty. These micro data allowed us to
match individual behaviors to performance and to 2. Research Setting
test dynamic panel data models of the relationships Over five years, we studied a medium-sized execu-
between multitasking, knowledge networks, and pro- tive recruiting firm with 14 regional offices through-
ductivity. Our analysis uncovered two key findings. out the United States. The employees occupy three
First, there is a concave relationship between mul- basic positions—partner, consultant, and researcher—
titasking and output per unit time. More multitask- and our interviews indicate that the contract execu-
ing is associated with increased project output, but tion process is relatively standard: A partner secures
Information Systems Research 23(3, Part 2 of 2), pp. 849–867, © 2012 INFORMS 851
a contract with a client and assembles a project team the candidate is rejected and the search continues.
(team size mean = 109, mode = 2, min = 1, max = 5) Rejections and continuing projects reduce output per
by assigning team members to projects. There is unit time by extending the duration of open projects
some limited room for negotiation in that consultants and reducing the number of completed projects. The
and researchers can suggest that their inclusion on a client therefore vets the output of a recruiter when it
project is not a good idea for different reasons. But decides whether the match is of high enough quality
typical power politics exist between the partners and to complete the search.
lower status employees.2 Once assembled, the team

establishes a universe of potential candidates includ-
ing those in similar positions at other firms and those
3. Theory
drawn from the firm’s internal database. These can- 3.1. Multitasking and Productivity
didates are vetted on the basis of perceived quality, The organization of work changed dramatically in the
their match with the job description, and other fac- late twentieth century. As flexible production replaced
tors. After conducting initial due diligence, the team mass production and as firms invested heavily in
chooses a subset of candidates for internal interviews, new IT, work organization shifted from Tayloristic
approximately six of whom are forwarded to the practices focused on centralized decision making and
client along with a formal report of the team’s due specialization to more holistic ones based on decen-
diligence. The team then facilitates the client’s inter- tralization and job rotation (Piore and Sabel 1984).
views with each candidate, and the client, if satisfied One practice in particular, multitasking, or the act of
with the pool, makes offers to one or more candidates. taking on multiple projects or tasks simultaneously,
A contract is considered complete when a candidate increased dramatically across industries and geogra-
accepts an offer. The period from client signature to phies during this period (Park 1996). Increasing com-
candidate signature defines project duration. petitive pressure, the demand for greater product
The core of executive recruiters’ work involves variety, and an increasing reliance on IT for internal
retrieving and understanding clients’ requirements organization enabled firms to become more adap-
and matching candidates to those requirements.3 tive and inspired them to rely on fewer workers
This matching process is information intensive and juggling more simultaneous tasks (Park 1996). An
requires assembling, analyzing, and making decisions important goal for managers and researchers is to
based on information gathered from various sources understand the effect of this increased multitasking
including team members; other firm employees; con- on productivity.
tacts outside the firm; and data on potential candi- Multitasking may increase productivity for sev-
dates in the internal proprietary database, external eral reasons. First, taking on multiple simultaneous
proprietary databases, and public sources of infor- projects allows workers to utilize lulls in one project
mation. Recruiters earn revenue by filling vacancies to accomplish tasks related to other projects. As is typ-
rather than billing hourly. The speed with which ical in project based work, there are inevitable peri-
vacancies are filled is therefore an important inter- ods of downtime during projects when employees
mediate measure of productivity. Contract comple- wait to have phone calls returned or tasks scheduled.
tion implies that the search team has met the client’s The noncontinuous nature of project work is well
minimum thresholds of candidate fit and quality, and suited to parallel processing across multiple simulta-
given controls for differences across contracts (e.g., job neous projects, and multitasking creates efficiency by
type, location), projects completed per unit time and smoothing labor hours over projects with bursty work
project duration are quality controlled measures of requirements. Executive recruiters experience down-
worker productivity. These are quality adjusted mea- time while waiting to schedule and conduct inter-
sures of performance because the market determines views and again while clients’ conduct their internal
if the match between clients’ requirements and can- reviews. Having multiple projects live at the same
didates’ characteristics is of high quality. When a time allows recruiters to switch their focus from one
recruiter produces a match, if the client is satisfied project to another during periods of relative down-
with the candidate, it hires the candidate and com- time, allowing them to use their time efficiently and
plete its search. If the match is low quality, however, increasing their productivity.
Second, information and skill complementarities
2
Projects are not likely to be randomly assigned to recruiters in across tasks can increase productivity by enabling
this setting. We therefore test the robustness of our main results to
workers to use information and knowledge gleaned
Heckman selection model specifications described in the robustness
section. from one task to help them execute other tasks
3
“Client” refers to a firm seeking to hire one or more executives; (Lindbeck and Snower 2000). When a recruiter
“candidate” refers to a potential hire; and “recruiter” refers to evaluates 10 potential candidates for a job and only 1
someone expert in locating, vetting, and placing candidates. of them is chosen for the placement, the recruiter can
use information from interviews and due diligence Most of the limited research on multitasking
on the remaining 9 candidates to help fill other posi- hypothesizes a linear relationship between multitask-
tions. Skill complementarities also enable productivity ing and productivity, arguing either for the costs or
gains through learning. As workers execute a given the benefits of multitasking in isolation (Coviello et al.
task, they develop transferrable skills that help them 2010). Considering the costs and benefits together,
improve their performance on other tasks. In inter- we hypothesize the relationship is instead concave.
views, recruiters reported the importance of learn- The benefits and costs of multitasking are both likely
ing how to navigate entry into companies and how to have nonlinear effects on productivity. There are
to evaluate the idiosyncrasies of different markets by likely diminishing marginal returns to task comple-
working on different types of projects and exchanging mentarities and smoothing bursty work because there
knowledge with their colleagues. One recruiter told are only so many hours in a day and a limited
us that “[c]all penetration can be really hard into pri- amount of overlapping skills and information that can
vate companies so researchers and consultants swap be transferred between projects. There are also likely
information to get through.” The more diverse the increasing costs to congestion and cognitive switch-
procedural information, the more situations in which ing as workers take on more simultaneous work. The
recruiters can use the information they have to solve average time to complete a set of queued tasks is
procedural problems. Having different information equal to the average number of tasks in the queue
on how to “penetrate” different private companies times the average arrival rate of new tasks (Little
can make recruiters more effective at gathering the 1961). As the arrival rate increases, the expected com-
information and contacts they need to match candi- pletion time goes to infinity. The cognitive costs of
dates to clients. These examples suggest that multi- multitasking are similarly increasing in the number
tasking should increase productivity both by reducing of simultaneous tasks. Switching costs, in time and
time wasted during natural lulls in bursty work and attention required to reorient oneself to one project
by taking advantage of information and skill comple- after having focused on another, increase as more
mentarities across projects. tasks are juggled simultaneously (Rubenstein et al.
On the other hand, taking on too many simulta- 2001, Monsell 2003).
neous projects creates congestion. As more projects The combination of diminishing marginal benefits
are attempted in parallel, recruiters face longer delays and increasing marginal costs to more multitasking
in getting back to the activities of a particular will produce a concave relationship between mul-
project while cycling through activities related to titasking and productivity. At low levels of multi-
other projects. Excessive delays force recruiters to tasking, workers will experience benefits from task
skip lower priority activities that help fill positions. complementarities and smoothing bursty work but
When employees juggle too many projects, work gets will not experience too much cognitive overload.
backed up and productivity suffers. The situation is At high levels of multitasking, the cognitive load is
analogous to congestion and throughput processes for higher, and the marginal benefits of smoothing work
queued tasks (Krishnan et al. 1997). For example, car and learning from other projects are smaller. All that
throughput on a highway initially increases as more is required for concavity is that one of these factors is
cars enter traffic, but eventually congestion increases nonlinear. If costs are increasing and benefits are lin-
processing times above arrival rates. Human beings ear or if benefits are diminishing and costs are linear,
experience an analogous mental congestion. Multi- there will be diminishing marginal returns to multi-
tasking is associated with short-term and long-term tasking. We therefore expect the following:
cognitive switching costs that reduce reaction times Hypothesis 1. There is a concave relationship between
and task completion rates and increase error rates multitasking and output per unit time.
(e.g., Rubenstein et al. 2001). Switching between two
or more tasks requires workers to reorient to each 3.2. Knowledge Networks and Multitasking
new task, which itself takes time and other attentional The effective exchange of information and knowl-
resources. Overlapping activities create confusion and edge is critical to work performance (Kogut and
associative competition, and responses are substan- Zander 1992), and informal communication networks
tially slower and more error-prone with frequent task play a key role in governing the flow of information
switching (Gilbert and Shallice 2002, Monsell 2003). and knowledge between employees (Aral et al. 2007,
Our interviews corroborate this story. As the Chief Hansen 1999, 2002, Reagans and Zuckerman 2001).
Information Officer (CIO) of the firm put it, “Every- IT-enabled communication technologies such as email
one can only deal with so many balls in the air. facilitate the rapid dissemination of information and
When someone gets ‘too far in,’ [takes on too many knowledge through informal networks (Sundararajan
projects] they lose touch. They can’t tell one project et al. 2011), increase the rate of learning spillovers
from another.” between workers (Foster and Rosenzweig 1995), and
lower the cost of applying information from one task from the local pool of competitors. Such opportuni-
to other tasks (Lindbeck and Snower 2000). In this ties could directly aid recruiters in placing candidates
way, knowledge exchanged through IT-enabled net- and filling job openings. This leads us to hypothesize
works is critical to multitasking performance. This the following:
is in part why IT investments are theorized to com-
plement multitasking—because they lower the cost Hypothesis 2A. On average, knowledge heterogeneity
of the information exchanges that make multitasking among recruiters’ contacts is positively associated with
a productive practice (Lindbeck and Snower 2000). productivity.

However, exactly how IT-enabled communication net-
On the other hand, knowledge heterogeneity is
works enable multitasking is less well understood.
One key characteristic of information exchanges costly. Having contacts with heterogeneous knowl-
theorized to affect productivity is the heterogeneity of edge makes it harder to transfer their knowledge
knowledge accessed through informal communication effectively (Reagans and McEvily 2003) because of a
networks. Social network theories such as the strength lack of mutual knowledge among members of the
of weak ties (Granovetter 1973) and structural holes network (Clark 1996). Mutual knowledge, the knowl-
(Burt 1992) argue that diverse network structures with edge that communicating parties share in common
ties to disparate parts of a network provide actors with and know they share (Krauss and Fussell 1990), is
heterogeneous knowledge. Because IT lowers the cost essential for mutual understanding, trust, and effec-
of accessing information that is geographically and tive communication and coordination (Cramton 2001).
socially distant (Malone et al. 1987, Hinds and Kiesler Shared information enables communication partners
2002), it enables access to more heterogeneous infor- to “get on the same page” and to understand the
mation and knowledge outside the recipient’s typical context and perspectives of their counterparts; it
domain. Recent research has moved beyond purely is therefore considered “a precondition for effective
structural accounts of this argument by directly mea- communication and the performance of cooperative
suring the knowledge heterogeneity workers connect work” (Cramton 2001, p. 349). Recruiters are better
to through their social networks (Rodan and Gallunic able to communicate knowledge about similar projects
2004) and it has recently been shown that diverse IT- because they share a common language within par-
enabled network structures actually provide workers ticular domains and are aware of idiosyncratic jar-
with more heterogeneous information (Aral and Van gon and recruiting practices in particular industries
Alstyne 2011). Yet there are conflicting theories about (Weber and Camerer 2003). For example, recruiters
the performance implications of accessing more het- who place candidates in the medical field report
erogeneous information and knowledge. relying heavily on their accumulated knowledge of
On one hand, access to heterogeneous knowledge the medical profession to understand client require-
can increase workers’ propensity for opportunity ments and candidate constraints and to communi-
recognition and provide information resources that cate with other recruiters about medical positions.
enable brokerage (Burt 1992). Information tends to be Processing heterogeneous knowledge is more diffi-
locally redundant, meaning ideas and solutions asso- cult because of the added complexity and interference
ciated with a particular task are most likely already associated with understanding cognitively dissimilar
known to those working on that type of task (Bulkley concepts (Underwood 1957, Darr and Kurtzberg 2000).
and Van Alstyne 2005, Dessein and Santos 2006). But In addition, there are greater costs to maintaining
socially distant information can be useful for solving networks with heterogeneous knowledge (Reagans
problems that are intractable given only local knowl- and McEvily 2003). Such networks require more time
edge (Burt 2004). For example, Hargadon and Sutton and effort to maintain because intellectually dissimi-
(1997) describe how engineers use their connections lar contacts are more likely to become socially distant
to diverse engineering and scientific disciplines to or disconnect entirely (Rodan and Galunic 2004). We
broker the flow of information from unconnected therefore propose the competing hypothesis:
industrial sectors, creating novel design solutions.
Actors with access to these diverse pools of informa- Hypothesis 2B. On average, knowledge heterogeneity
tion “benefit from disparities in the level and value among recruiters’ contacts is negatively associated with
of particular knowledge held by different groups” productivity.
(Hargadon and Sutton 1997, p. 717). Access to het-
erogeneous knowledge is especially important for job A priori, it remains unclear which hypothesis,
placement (Granovetter 1973). In Granovetter’s classic Hypothesis 2A or Hypothesis 2B, should dominate.
study, information about job openings from diverse The net benefits to knowledge heterogeneity are a
social circles was more fruitful because there was function of the benefits from opportunity recogni-
less competition in markets that were socially distant tion and novel solutions and the costs of maintaining
heterogeneous networks and processing unfamiliar of complexity in the solution are borne unnecessar-
knowledge. Existing literature is inconclusive about ily. Empirically, organizations that achieve the best fit
when the benefits will outweigh the costs and thus the between their internal complexity and that of their
circumstances under which access to heterogeneous environment perform best (Miller 1992).
knowledge will improve performance. We therefore Applying this argument to the relationship between
propose a mediating concept to predict tipping in this multitasking and knowledge, the costly acquisition
essential relationship. We argue that task heterogene- of heterogeneous knowledge should produce greater
ity helps determine the productivity value of knowl- productivity gains when the tasks being attempted are
edge heterogeneity. themselves heterogeneous. For executive recruiters,
The net benefits of knowledge heterogeneity have adding heterogeneous project types to their work-
been demonstrated in the context of innovation, load necessitates acquisition of more fine grained
where the recombination of ideas can stimulate cre- information and knowledge on a greater num-
ativity and novel solutions (Hargadon and Sutton ber of dimensions. For example, for most project
1997, Burt 2004). We propose that knowledge hetero- types, understanding generic educational qualifica-
geneity should also complement heterogeneous mul- tions (which university degrees are more highly
titasking. Multitasking can either be specialized or respected) is sufficient to screen potential candidates.
heterogeneous in that workers can take on tasks of However, adding projects in the medical, nursing,
the same type or of different types simultaneously. and technology domains requires recruiters to under-
Some recruiters specialize in a particular job category stand (or connect with colleagues who understand)
(e.g., nursing or IT), whereas others work on many which universities are highly regarded in a particu-
different types of projects simultaneously (e.g., nurs- lar specialization (e.g., radiology or geriatric nursing),
ing, IT, finance, and human resources). Knowledge though they may not be the same institutions that
heterogeneity should complement this type of task
are highly regarded overall. As recruiters add addi-
heterogeneity for several reasons.
tional project domains—not just additional projects in
First, when knowledge resources fit a worker’s
the same domain—to their multitasking profiles, they
task profile, the costs of processing heterogeneous
require access to a more heterogeneous pool of infor-
knowledge are offset by opportunities to apply that
mation to produce the best matches between candi-
knowledge productively. The concept of fit or con-
dates and open positions.
gruence has been applied in organizational theory
Second, greater task heterogeneity increases absorp-
to explain firm performance, individual performance,
tive capacity and enables workers to process het-
and knowledge management outcomes (Argote et al.
erogeneous knowledge more efficiently. Individuals
2003). For example, the fit between organizational
are better able to understand knowledge in domains
design and environmental turbulence predicts firms’
survival (Sorenson 2003). The fit between the nature with which they have prior experience because they
of knowledge and the type of tie through which it learn by associating new knowledge with what
is transferred affects learning (Uzzi and Lancaster they already know (Cohen and Levinthal 1990). As
2003). The fit between task characteristics and prob- recruiters are exposed to projects of different types,
lem solving affects productivity in technical support they become better equipped to efficiently under-
work (Das 2003). There is also a tradeoff between stand and absorb information and knowledge on a
specialized information that facilitates communica- greater variety of domains. Knowledge heterogeneity
tion within one type of function because it limits increases the costs of acquiring knowledge because of
coordination across functions (Cremer et al. 2007). the lack of a common language with which to com-
Contingency theory holds that organizational units municate ideas efficiently. Greater task heterogene-
(e.g., firms, business units, and teams) must match ity increases absorptive capacity and thus reduces
their internal complexity (e.g., functional divisions, these costs. In addition, exposure to a greater vari-
product release cycles) to the environment’s external ety of task domains also improves our ability to pro-
complexity (e.g., customer segments, industry clock- cess information and knowledge that is dissimilar to
speed) to achieve the best performance (Morgan 1986, what we already know (Burt 2004, Rodan and Galunic
Lawrence and Lorsch 1967). With too little internal 2004). Processing diversity is itself a learned skill. The
heterogeneity, organizations mistakenly process dif- greater the diversity of our experience, the more we
ferent instances of external heterogeneity in the same are able to comprehend novel ideas to which we have
way, whereas too much internal heterogeneity rela- not been previously exposed. Negotiating task diver-
tive to the environment is excessively costly. When sity builds these skills and thus enables workers and
the complexity of the organization exceeds that of managers to process novel information and knowl-
the environment, resources are wasted and the costs edge more effectively (Burt 2007).
Finally, access to heterogeneous knowledge enables first is complete accounting records of (i) projects
workers with heterogeneous tasks to realize synergies completed and revenues generated by individual
across project types through inter-task or multitask recruiters, (ii) contract start and stop dates, (iii) projects
learning. IT lowers the cost of multitask learning, the handled simultaneously, (iv) project team composition
ability to learn how the experience gained from one and share weighted effort devoted to each project, (v)
skill enhances another skill, in order to “exploit com- job levels of recruiters, and (vi) job levels of placed can-
plementarities among tasks” by lowering the costs of didates. Accounting data cover the period 2001–2005
“providing employees with greater access to infor- and provide excellent output measures.
mation about other employees’ work” (Lindbeck and The second data set covers 10 months of complete
Snower 2000, pp. 355–356). In particular, access to email history captured from the corporate mail server
heterogeneous knowledge facilitates applying infor- during two equal periods from October 1, 2002, to
mation gleaned from the execution of a particu- March 1, 2003, and from October 1, 2003, to March 1,
lar task to a different task entirely. For example, 2004. Email data have the potential to overcome bias
when executive recruiters who typically conduct CIO in survey respondent recall of their social networks
searches begin to take on Chief Executive Officer (e.g., Bernard et al. 1981) by objectively recording
(CEO) searches, they are exposed to the executives who communicates with whom and when. However,
to whom CIOs report. By communicating with other email is not without its own limitations. We there-
recruiters who are better versed in CEO searches, they fore took great care in collecting and analyzing our
learn how CEOs evaluate CIOs and develop a bet- social network data. We designed and developed cap-
ter understanding of the qualities that make a suc- ture software specific to this project and took multiple
cessful CIO. Lessons learned from the CEO search steps to ensure data integrity and boost participation
process, through communication with colleagues with while minimizing bias, intrusiveness, and risks to
this dissimilar knowledge, can then be applied to CIO security. We used cryptographic techniques to pre-
searches. Such heterogeneous knowledge can also serve individual privacy and excluded spam mes-
help recruiters understand when and under what cir- sages by eliminating external contacts who did not
cumstances a doctor may, for example, make a good receive at least one message from someone inside the
CEO of a medical products company. Communicat- firm. The project went through nine months of human
ing with contacts with heterogeneous knowledge thus subjects review prior to launch. Details are provided
enables the application of learning from one task to in Appendix A4 and in Van Alstyne and Zhang (2003,
help complete other tasks (e.g., learning how to bet- 2009) and Reynolds et al. (2009). Participants received
ter fill CIO positions by understanding the CEO’s $100 in exchange for permitting use of their data,
perspective on CIOs) as well as the importation of resulting in 87% coverage of eligible recruiters and
resources from one task to help complete other tasks more than 125,000 email messages captured.5
(e.g., learning how candidates from one project type The third data set contains survey responses on
can fill positions in another project type). information-seeking behaviors, experience, education,
Task heterogeneity increases the benefits of knowl- human factors, and time allocation. Survey questions
edge heterogeneity by increasing the fit of recruiters’ were generated from a review of relevant social net-
knowledge resources to their tasks, improving mul- work, behavioral, and economic literature and from
more than two dozen interviews with recruiters.
titask learning, and increasing recruiters’ ability to
Experts in survey methods at the Inter-University
realize synergies across projects. In addition, task
Consortium for Political and Social Science Research
heterogeneity lowers the costs of processing heteroge-
vetted the survey instrument, which was pretested
neous knowledge by increasing recruiters’ absorptive
for comprehension and ease of use. Participants
capacity. We therefore expect that workers engaged in
received $25 for completed surveys, and participation
heterogeneous multitasking benefit most from access
exceeded 85%. The fourth data set, gathered outside
to heterogeneous knowledge and hypothesize the
the firm, involves independent controls for placement
following:
city attributes used to control for project difficulty and
Hypothesis 3. The interaction effect of knowledge het- described in §6.
erogeneity and task heterogeneity is positively associated
with productivity. 4
An electronic companion to this paper is available as part of the
online version at http://dx.doi.org/10.1287/isre.1110.0408.
5
F -tests comparing performance levels of those who opted out with
4. Empirical Methods those who remained did not show statistically significant differ-
ences. F -statistic (Sig): Yearly Revenue 2002 = 202954001365, Yearly
4.1. Data Compensation 2002 = 008374003655, Yearly Multitasking 2002 =
Data for this study include three data sets from 003864005385. We found similar results for those who opted out of
inside the firm and one from outside the firm. The the survey.
Figure 1 Multitasking Profile of Employee #102 (September 5, 2002–November 26, 2002)
CEO (Job class 1); Ann Arbor, MI

Revenue value of projects 189 k
Medical Executive (Job class 3); Houma, LA

74 k
CFO/COO (Job class 2); Toledo, OH
68 k
Medical Executive (Job class 3); Cincinnati, OH
57 k
Other (Job class 8); Madison, WI
45 k
t (weeks)
02
2
02
02
02
02
02
02
/0
/0
/0
/0
9/
5/
2/
6/
5/
2/
9/
05
12
19
28
/1
/0
/1
/2
/0
/1
/1
9/
9/
9/
9/
10
10
10
10
11
11
11
Number of
2 4 5 4 3 2
projects
Notes. A multitasking profile displays all of an employee’s ongoing projects during a particular period, including each project’s job class and city. The graphic
below the profile displays the employee’s number of projects over each day during this period. On September 19th the recruiter is working on two simultaneous
projects. On October 5th the recruiter is working on five simultaneous projects.
4.2. Measurement the period from September 5, 2002 to November 26,

2002, and describes how multitasking is indexed for
4.2.1. Dependent and Independent Variables.
this recruiter during this period.
Output. We measured project output as the num-
Duration. We measured project duration as the
ber of projects recruiters completed per month.6 To
number of days from a project’s start date to the day
construct monthly measures of the completions for a
the position is filled. Our data record the precise start
recruiter, we observe which projects he is working on
and completion dates of projects in a uniform way
and the duration of those projects. We amortize the
based on the accounting practices of the firm. To con-
completion of projects uniformly over the projects’ life
struct the monthly individual duration variable, we
cycles. So for example, if a recruiter is working on
averaged the duration of the projects a worker is
only one project that takes 100 days to complete, her
working on in each month.
output on each of these 100 days would be 1/100th
Task Heterogeneity. We measured task heterogeneity
of a project. We aggregated output to the monthly
using the Teachman/Shannon Entropy Index. There
level by summing output over days in the month.
are eight categorical project types recorded in the
For example, a project that is generating 1/100th of
a project in output per day produces 28/100th of a firm’s accounting records, and each project is assigned
project of output in February. We considered using to one and only one category. The firm categorizes
nonuniform distributions of completions over the life projects into the following categories: CEO, Chief
of the project; however, we did not have strong evi- Operating Officer (COO), CIO, Medical Executive,
dence to support different distributional assumptions Human Resources Executive, Business Development
about when work was really being completed during Executive, Nurse, and “Other.” We use these cate-
project execution (e.g., front loading or back loading gories as the relevant areas of recruiters’ expertise.7
the credit for work done during a project). We define the heterogeneity of a recruiter’s tasks as
Multitasking. We define multitasking as the act of follows:
X8
taking on multiple simultaneous projects in parallel. thit = − scti ln4scti 51
We measured individual daily multitasking by the c=1
number of projects an employee is working on dur- where scti represents the fraction of recruiter i’s projects
ing any given day. We then aggregated multitasking in job class c at time t. The Teachman Index has been
by averaging the number of projects the recruiter was used extensively in the social sciences to measure the
working on over the days of the month. Figure 1 dis- diversity of many different variables (Teachman 1980)
plays a multitasking profile for one employee during
7
We also ran specifications controlling for other categorization
6
We focus on output (projects completed) rather than real output schemes and subcategories of “Other” jobs clustered by their
(revenues generated) because reliable deflators for recruiters’ real project descriptions, which returned similar results. We therefore
output are not available. retained the firm’s original classification.
Figure 2 Task Heterogeneity of Two Employees

90
83
80 President /CEO HR Executive
70 COO Business Development Executive
Number of projects
CIO Nurse
60
Medical Executive Other
50
40
31
30 24 25
20
13
10 8 9 8 9
3 6
0 1 0 1 1
0
Recruiter #2 Recruiter #5
Notes. This figure displays the distribution of two recruiters’ projects in a single year over the eight job classes classified by the firm: President/CEO, COO, CIO,
Medical Executive, HR Executive, Business Development Executive, Nurse, and Other. Although they have almost identical total numbers of projects, 108 and
114, respectively, recruiter #2 has a more even distribution of projects over job classes and thus a higher task heterogeneity index (TH = 1071) than recruiter
#5 (TH = 1002), who is more specialized.
In this measure, qik = nj=1 wij Pjk represents the

P
and is particularly well suited to the measurement
of categorical data (Ancona and Caldwell 1992). If a total amount of prior experience in i’s network in
recruiter has no projects in a particular category for a project class k, weighted by the strength of the tie
given time period, the value assigned to that category to each of i’s contacts wij (the number of email mes-
is zero. We calculated the diversity of each recruiter’s sages exchanged between i and j in a given month)
multitasking portfolio daily because projects can start and summed over all of i’s contacts j. Pjk repre-
and end on any day of the calendar month. We then sents j’s prior experience in job class k, where P is an
aggregated the diversity of each recruiter’s task het- effort share weighted count of the number of projects
erogeneity to the monthly level by averaging daily of class k that j has completed. The denominator
diversity scores over the days in each month. Task het- qi = 8k=1 qik represents the total project experience
P
erogeneity scores in our data range from 0 to 1.87, with in i’s network summed over all project classes. Thus,
a mean of 1.15 and standard deviation of 0.45. Figure 2 the ratio 4qik /qi 5 is the share of prior experience in
describes how task heterogeneity is calculated.
project class k over the total project experience among
Knowledge Heterogeneity of Network Contacts 4Knowl-
i’s communication network partners. We then con-
edge Heterogeneity5. To measure recruiters’ access to
struct a Herfindahl Index of this ratio measuring the
expertise and knowledge during the execution of their
concentration of expertise across job classes among
projects, we combined data on the email network with
i’s contacts. To measure heterogeneity rather than
data on recruiters’ accumulated past project experi-
ence. We measure the knowledge heterogeneity of concentration, we subtract this measure of project
recruiters’ network contacts by directly evaluating experience concentration from one. As the expertise
the diversity of their contacts’ expertise accumulated in i’s network becomes more concentrated in a few
through the history of the projects they have worked project classes, the knowledge Heterogeneity measure
on in the past. In this setting, recruiters develop decreases.8 Reagans and McEvily (2003) constructed
expertise as they complete projects of different types. a similar measure of “expertise overlap,” although
Because there is little in the way of formal train- our measure uses accounting records to record project
ing to become an executive recruiter, we do not use experience (rather than self-reported expertise) and
recruiters’ educational backgrounds but rather the weights the expertise in an employee’s network by
distributions of their prior project experience over the strength of her ties to each contact and the effort
project types to measure knowledge heterogeneity. share of each alter on each project. Our measure of
The Knowledge Heterogeneity variable is constructed knowledge heterogeneity also changes over time as
using a Herfindahl Index of the expertise of an actor’s recruiters complete more projects of different types
contacts in each month, weighted by the strength of
the tie to each contact. Because the firm records each
8
employee’s effort share on each project, the exper- To normalize the Knowledge Heterogeneity measure to range from
tise of a recruiter is share weighted by the amount zero to one, we scale the measure by multiplying the final metric by
(8/7): KHi = 48/7561 − 8k=1 4qik /qi 52 7. This scaling does not affect the
P
of effort he recorded against any given project in the distribution of the measure or the outcome of any of our analyses.
accounting data. The measure is constructed as fol- It simply allows the measure to range from zero to one, easing
lows: KHit = 1 − 8k=1 4qik /qi 52 .
P
interpretation.
Figure 3 Dynamic Email Network of a Subset of the Recruiters Over Time
(a) October 2003

19
57
20
23 64
60
27
46 73
5 24
61
69 55
29 36
65 66
47 58 42
54
10
62 2
41 63
38
18 56 32 12
7
67 49
15 4 43
40 59
21 34
39 50 1
45
71 16 68
25
37 17
72 3
70
22 26 14
30
(b) January 2004 66
71 27
26
65
73 55 25 42
29 60 4
18 22
21 59 36
7
62
40 41
32 69
61 54 43
49 10
34
58 68
67 47 12
37 39
38 50
72 70 13
3
15 24 20
63 56
16 23
57 2
1 45 46
17
14
19
Notes. We use email messages to map the communication network at this firm. Each node represents an individual in our data set, and the thicknesses of the
links represent the amount of email traffic.
Table 1 Descriptive Statistics
Variable Obs. Mean SD Min Max
Individual variables (monthly data)

Output (project completions) 630 0038 0036 0 1069
Multitasking 630 5084 5021 0 24096
Average Duration 630 225023 165077 0 921004
Task Heterogeneity 462 1016 0045 0 1087
Knowledge Heterogeneity 560 0087 0008 0051 0097

Project variables
Team Size 11382 1098 0060 1 5
Age 11372 45007 7077 27 63
Education 11372 17074 1002 15 20
Industry Experience 11372 14047 7094 1 39
Multitasking 11382 8086 2084 1060 18031
Project Duration (days) 11382 206090 123069 3 981
Project Revenue Value ($) 11301 561962050 251780070 111666 2371636
Team Interdependence 11382 1036 00749 0005 4065
Task Routiness 11382 1018 0088 0005 4
F2F Contacts 11382 4020 8068 0 75
Phone Contacts 11382 15076 10054 1 70
Email Contacts 11382 20014 18046 1 100
ESS (Database) Skill 11382 3010 1092 0012 9030
ESS (Database) Use (%) 11382 15079 14045 0 80
City characteristics
Cost of Living 11187 358065 144049 233060 21059060
Crime per Capita 11187 61262040 21648076 0 141603080
Sunny Days per Annum 11187 212015 33093 23 300
Commute Time (minutes) 11187 20022 5038 9 43
Notes. There are 1,382 total projects in the data and 1,187 different cities in which projects are conducted. There
are 630 total person/month observations.
and as recruiters’ communication networks change more experience with recruiters and with job mobil-
from month to month (Aral and Van Alstyne 2011).9 ity. To control for the effect of Job Type, we include a
4.2.2. Control Variables. Our main specification dummy variable for the eight job classes the firm rec-
(described in §§4.4 and 4.5) uses first differences to ognizes in its own records. We also control for Task
remove variation from unobserved individual hetero- Characteristics, measured by survey responses about
geneity of recruiters. However, some of our robustness the routineness and interdependence of tasks, for sim-
checks do not employ first differences or fixed effects ilar reasons. Adding more labor to a project may
or are performed at the project level, which necessi- speed work or slow it down depending on tradeoffs
tates controlling for differences between projects. We between the complexity of a larger team and the out-
include the following control variables on individual put contribution of additional labor. We therefore also
and project characteristics to control for observables include Team Size.
differences between recruiters and projects. City Characteristics. Crime rates, weather condi-
Characteristics of Individual Recruiters. We included tions, the cost of living, and other city characteristics
controls for traditional demographic and human cap- may affect the attractiveness of a position and influ-
ital variables (age, gender, level of education, indus- ence contract completion because of placement diffi-
try experience, and managerial level) to control for culty. To control for these factors we collected data
observable differences in worker education, skill, and on the 768 cities in which searches took place from
experience. We also utilize fixed effects specifications the website Sperling’s Best Places.10 Factor analysis
to control for unobserved heterogeneity across indi- revealed four underlying factors with significance in
vidual recruiters. our models: cost of living, crime rates (violent and prop-
Project Characteristics. Certain positions may be eas- erty crime per capita), weather conditions (sunny days
ier or harder to fill. Clients may demand that new per annum), and commute time. We therefore included
CEOs be named quickly. Senior executives also have these controls in project level analyses.11
9
We use the Herfindahl Index to remain comparable to prior
10
research that measures the expertise heterogeneity of network con- http://www.bestplaces.net/.
11
tacts (e.g., Reagans and McEvily 2003), but Teachman diversity for- We collected and tested city level data on tax rates for sales, income,
mulations produced qualitatively similar results. and property; the aggregate cost of living; home ownership costs; rate of
Temporal Variation. In our data, business exhibits (e.g., multitasking) and speed (e.g., duration).12 In par-
seasonal variation, picking up sharply in January and ticular, ceteris paribus, when tasks take longer to com-
declining steadily throughout the year. Exogenous plete on average, total output will be reduced, whereas
shocks to demand for executive recruiting services doing multiple tasks simultaneously will increase out-
could drive increases in both the amount of work put. Of course, there may be interactions, which is one
employees take on (multitasking) and the output they of the questions we study in this paper.
generate. In this case, we could find a spurious corre-
lation between multitasking and output driven by an 4.4. Estimation Procedures

exogenous increase in demand for the firms’ services. We estimated the model specified in Equation (1)
There may also be nonseasonal transitory demand using monthly panel data. The relationships between
shocks in a given year or month of a year. We control output, multitasking, duration, and other indepen-
for seasonal and transitory variation using dummy dent variables are likely endogenous. We there-
variables for year, month, and year/month separately. fore estimate the model using the Arellano-Bover
Table 1 provides variable descriptive statistics, and in (1995)/Bundell-Bond (1998) system GMM estimator
our analyses, an observation is one person-month. as follows:
qit = + 1 mtit + 2 mtit2 + 3 dit + 4 thit + 5 khit

4.3. Model Specification
In white collar work settings where workers do not + 6 4thit · khit 5 + t + i + vit + uit 0 (2)
bill hourly and in which labor is not compensated
by the hour (as in our case), how workers work—for The error term it from Equation (1) is decomposed
instance, whether they take on multiple simultaneous into several components: t is an intercept reflecting
projects or rather work sequentially—can affect their common temporal productivity shocks, i is an unob-
productivity. If we consider white collar workers to be served individual effect, vit is a residual productivity
managing queued tasks, each with distinct start and shock, and uit represents serially uncorrelated mea-
stop times, we can measure the relationship between surement errors.13
multitasking and productivity directly. In our pro- There are several difficulties in estimating this spec-
duction model, employees work on projects whose ification that must be overcome to obtain robust
number and duration determine total output. A pro- parameter estimates. First, the right-hand side vari-
duction function to represent intermediate process- ables are assumed to be endogenous. As causality
ing therefore characterizes output (qit ) as a function may run in both directions, for example from mul-
of the number of simultaneous projects an individual titasking to output or from output to multitasking,
is working on at any given time (mtit ), a quadratic the regressors may be correlated with the error term.
measure of the number of simultaneous projects to Second, time invariant characteristics of individual
allow for nonlinearity (mtit2 ), project duration (dit ), the recruiters such as their age, experience, tenure, and
task heterogeneity of recruiters’ multitasking portfo- education as well as other unobserved heterogeneity
lio (thit ), the knowledge heterogeneity of recruiters’ could bias parameter estimates. The system GMM esti-
contacts (khit ), and an error term it as specified in mator uses a system of two equations—the original
Equation (1). Equation (2) and one transformed by first differenc-
ing (3)—and controls for endogeneity by using lagged
qit = + 1 mtit + 2 mtit2 + 3 dit + 4 thit values of the differences and levels of endogenous
variables as instruments to identify parameter esti-
+ 5 khit + 6 4thit · khit 5 + it (1) mates Arellano and Bover 1995, Bover and Bond 1998).
This specification is closely related to models of ãqit = + 1 ãmtit + 2 ãmtit2 + 3 ãdit + 4 ãthit
queued task execution in services work (e.g., Adler
et al. 1995, Hopp et al. 2007) and models of + 5 ãkhit + 6 ã4thit · khit 5 + ãt + ãvit + ãuit
parallel and overlapping queued task processing (3)
(e.g., Krishnan et al. 1997) from the engineering and
operations management literatures, which specify the The system GMM estimation procedure controls
execution of queued tasks as a function of load for endogeneity and also eliminates bias from unob-
served heterogeneity. First differencing removes the
home appreciation; air quality, water quality; number of superfund sites
near the city; physicians per capita; health care costs per capita; violent
12
Using the multiplicative model Qit = MTit 1 · Dit2 and the log
and property crime per capita; public education expenditures per capita; reduction log4Qit 5 = +1 log4MTit 5+2 log4Dit 5+controls+it pro-
average student to teacher ratio; an index of ultraviolet radiation levels; duces nearly identical statistical results, with 1 < 1 also indicating
risk indices for earthquakes, tornadoes, and hurricanes; average number concavity.
13
of sunny, cloudy, and rainy days per year; average number of days below Tests reveal no serial correlation in the residual productivity
freezing per year; and average commute time to work. shocks, as shown in the results tables.
i and thus eliminates potential bias from observed 5. Results

or unobserved individual characteristics. The estima- Two primary results emerged from our estimation
tor addresses endogeneity in the regressors by instru- of Equation (6). First, there is a concave relation-
menting differences with available lags of levels and ship between multitasking and output per unit time.
variables in levels with suitable lags of their own first More multitasking is associated with more project
differences. output to a point, after which there are diminish-
The model assumes that the remaining measure- ing marginal returns to increased multitasking. The
ment error uit is independent and identically dis- results in Table 2 show that on average, a one stan-
tributed (i.i.d.), which in our case may not be true dard deviation increase in multitasking (taking on five
because individual recruiters work together, making more projects) is associated with a nearing doubling
it likely that the errors in their output are corre- of output per month. The coefficient on the multitask-
lated. To account for this potential correlation, we ing squared term is negative and significant, implying
adapted a two-step adjustment from spatial economet- a concave relationship. Although more multitasking
rics designed to filter out dependencies between non- is associated with greater project output, there are
independent observations prior to the application of diminishing marginal returns to increased multitask-
dynamic panel data models (Badinger et al. 2004). Fol- ing. Increases in average project duration are also
lowing Getis and Ord (1992), we applied a commonly associated with decreases in output per unit time.
used spatial filter to remove correlations between non-
A one standard deviation increase in average project
independent observations in the first step and then
duration (an additional five and a half months to com-
estimated the model using the system GMM estima-
plete a project on average) is associated with a 50%
tor in the second step. The filtering process typically
decrease in output per month.
uses a decreasing function of distance to remove cor-
We believe these results demonstrate a funda-
relations between regions that are connected in some
mental tradeoff between the benefits and efficiency
way (e.g., they exchange goods, labor, or foreign direct
costs of additional multitasking. As workers take on
investment). We applied a similar procedure but esti-
mated correlations between individual workers using more simultaneous projects, they see benefits from
the number of projects that they worked on together. smoothing bursty work requirements and from cross-
The logic of the filter is that correlations of the output task complementarities, but each additional task cre-
(or the multitasking) of two individual workers will ates switching costs, mental congestion, and a loss
be increasing in the number of projects they work on of efficiency. To test this explanation, we examined
together in a given period. To remove these correla-
Table 2 System GMM Dynamic Panel Data Estimates of Output
tions we calculated filtered measures of output (and
other variables) qit∗ by adjusting qit using the weighted Output
output of i’s coworkers as follows, where weights wijt
Dependent variable 1 2
are the number of projects i and j worked on together
in time t: Multitasking 0039∗∗ 0036∗∗
400085 400075
xit × 4 Nj=1 wijt /4N − 155
P
∗ Multitasking squared −0011∗ −0008∗∗
xit = 1 where (4)
Git 400065 400045
XN N
X Average Duration −0012∗∗ −0018∗∗
Git = wijt xjt xj (5) 400045 400065
j=1 j=1 Task Heterogeneity 0002
400075
Because our data are heteroskedastic, we estimated
Knowledge Heterogeneity of Contacts −0027∗∗
standard errors using the Windmeijer (2005) correc- 400115
tion. Thus, we estimated the following dynamic panel Task Heterogeneity× 0022∗∗
data model using network autocorrelation filtered Knowledge Heterogeneity of Contacts 400115
variables and the system GMM estimator with robust
standard errors: Temporal controls Month Month
∗
qit∗ = + 1 mtit∗ + 2 mtit2 + 3 dit∗ + 4 th∗it AR(1) 0013 0010
AR(2) 0041 0012
+ 5 kh∗it + 6 4th∗it · kh∗it 5 + ∗it 0 (6) Hansen test (p-value) 0020 0057
Section 5 presents results from our main specifica- Difference in Hansen test (p-value) 0021 0075
tion and estimation procedure. We also examined the Observations 630 431
robustness of our results to several different model Notes. This table reports dynamic panel data models using network autocor-
specifications and estimation procedures and tested relation filtered variables and the system GMM estimator with robust stan-
for selection effects in the assignment of greater mul- dard errors.
∗∗
titasking as described in §6. p < 0005; ∗ p < 0010.
the relationship between multitasking and duration partners’ social and organizational power (e.g., Pfeffer
directly. Table 3 shows results of dynamic panel data 1981) could enable them to take on a relatively small
estimates of the relationship between multitasking number of high value, high priority projects, creating
and average project duration, estimated in the same a relationship between leisure (less multitasking) and
way as the main specification in Equation (6): output in the partner strata of our data. This explana-
tion is consistent with incentive theories of deferred
dit∗ = + 1 mtit∗ + 2 th∗it + 3 kh∗it + ∗it 0 (7) compensation, where workers are underpaid early on
in their careers (e.g., [Pay = f (revenues)] < marginal

Results show that multitasking has a significant pos-
revenue product) and paid more than their marginal
itive association with average project duration, sup-
revenue product later on (Lazear 1979).
porting the interpretation that although more work is
Second, there may be unobservable drivers of both
getting done as recruiters multitask more, each project
multitasking and output that create the concavity.
is taking longer to complete. A one standard deviation
For instance, productive workers may spend time
increase in multitasking (taking on five more projects)
on other tasks we don’t observe that allow them to
is associated with projects taking an additional 48 days
work on fewer projects simultaneously while produc-
longer to complete on average. Together these results
ing more output. If these productive workers worked
provide a plausible explanation for the concave rela-
tionship between multitasking and output—workers on slightly more projects than did inexperienced new
produce more output per unit time as they multitask workers, but fewer projects than did experienced
more but are less efficient per task because of switch- workers who did not spend time on these unobserved
ing costs, overload, and congestion. Because the costs tasks, a concave relationship between multitasking
are increasing and the benefits are decreasing with and output could be observed.
more multitasking, the relationship between multi- Third, there could be exogenous temporal vari-
tasking and output per unit time is concave. ation. Clients may hire top management teams in
However, we also considered three alternative groups, creating temporal clusters of contracts that
explanations and let the data speak to which is the are both few in number and high in revenue value
most likely. First, correlated differences between indi- (and thus priority). If this type of turnover happens
vidual workers and their project portfolios could pro- seasonally—for example, near the beginning or end
duce the concave relationship between multitasking of the fiscal year—then temporal clusters of fewer
and output. For example, new inexperienced workers high value projects could create a concave relation-
may take on fewer, less valuable projects, whereas the ship. Exogenous transitory shocks to client demand or
most experienced consultants take on the largest num- large simultaneous layoffs in low revenue value posi-
ber of projects. These two clusters could explain the tions could also inspire ramping up of production.
first and last third of the concave relationship, whereas Although the alternative explanations conform to
theory and could explain the concave relationship
Table 3 System GMM Dynamic Panel Data Estimates of between multitasking and output, our specifications
Project Duration suggest they are unlikely. Our estimates of the rela-
Dependent variable Duration tionship between multitasking and output are robust
to specifications controlling for unobserved hetero-
Multitasking 0029∗∗ geneity across individuals, and holding constant vari-
400145
Task Heterogeneity −0004 ation driven by status, organizational power, or career
400165 tenure, as well as unobservable practices or charac-
Knowledge Heterogeneity of Contacts 0050 teristics. Our controls for temporal variation (both
400375 seasonal variation and exogenous shocks to demand)
Task Heterogeneity × −0044
Knowledge Heterogeneity of Contacts 400325
also discount explanations based on temporal clusters
of projects of different types. Because our quantitative
Temporal controls Month and qualitative data discount the alternative explana-
tions, we are drawn to interpret the results in Tables 2
AR(1) 0041
AR(2) 0043 and 3 as evidence of a tradeoff between the increas-
Hansen test (p-value) 0068 ing marginal costs and decreasing marginal benefits
Difference in Hansen test (p-value) 0050 of multitasking.14
Observations 431
Note. This table reports dynamic panel data models using net- 14
Because we have not controlled for all possible sources of endo-
work autocorrelation filtered variables and the system GMM geneity or identified equilibrium values of multitasking and out-
estimator with robust standard errors. put, the optimal levels of multitasking implied by our parameter
∗∗
p < 0005; ∗ p < 0010. estimates may not be precise optima in equilibrium.
The second primary result of our analysis is that 6. Robustness

recruiters with network contacts who have heteroge- Although the GMM estimator addresses potential bias
neous knowledge are less productive on average, but from unobserved heterogeneity and endogeneity, we
more productive when juggling diverse multitasking tested the robustness of the main findings to several
portfolios. This implies that although heterogeneous alternative specifications and estimation procedures.
knowledge accessed through email contacts is costly First, it is likely that project assignment is not random
to process and maintain, it improves the productiv- in this setting. For example, it could be that recruiters
ity of workers who are responsible for diverse tasks. who are better able to multitask are more likely to
Holding multitasking and the degree of own special- choose to take on more simultaneous projects or are
ization constant, communication with contacts whose assigned to more simultaneous projects. To test the
expertise is diverse is correlated with lower produc- effects of selection on our results, we estimated the
tivity. This suggests there are costs to greater knowl- relationship between multitasking and output using
edge heterogeneity among network contacts. a Heckman two-step selection model. We estimated
However, a plausible alternative explanation is that multiple versions of this model, including but not lim-
ited to those reported in Appendix B Table 1. We col-
recruiters who specialize do so by focusing on projects
lected new data from the Bureau of Labor Statistics
that are inherently easier and therefore have a sig-
on the levels and growth of statewide employment
nificantly lower mean duration. If specialists special-
and gross domestic product (GDP) in the states where
ize in easier projects and have contacts with lower
the firm operates (both in states where they have
knowledge heterogeneity, this might explain the neg- offices and in which they have clients) for sectors of
ative relationship between knowledge heterogeneity relevance to their work (executive recruiting, profes-
and productivity. To test this alternative explanation sional services, education, and health care and over-
we first examined whether specialists were focused all levels and growth of statewide employment and
on particular job classes and then estimated whether GDP in these states). We weighted these variables by
these job classes had lower project durations on aver- the number of projects a recruiter had in each state.
age. Our tests revealed that only one job class was These data capture exogenous shocks to demand for
positively associated with specialization at greater the recruiters’ services and represent valid exclu-
than a 0.05 correlation—business development jobs sion restrictions because their effect on output can
(pairwise correlation = 00311 p < 0005). The rest were only come through increased multitasking (increased
either not correlated or negatively correlated with multitasking in this one firm is unlikely to move
specialization, meaning specialists tended to special- statewide employment or GDP, but changes in aggre-
ize in business development jobs (though not exclu- gate demand can create exogenous shocks to demand
sively). However, the average duration of business for the firm’s services; see Levitt 1996). We also
development projects (mean = 199 days; S.D. = 97) include more traditional observable characteristics of
was very similar to the average project duration recruiters in these models (e.g., age, gender, industry
across all projects (mean = 207 days; S.D. = 124). experience, firm tenure, and position within the firm
As expected, t-tests showed this difference was not as well as the primary city in which recruiters work)
statistically significant (t-statistic = −0077, N.S.). Spe- to control for selection bias based on observables.
cialists were not specializing in particularly easy In all models the relationship between multitasking
jobs. We therefore interpret the negative association and output remained concave and highly significant
and duration was negatively associated with output,
between knowledge heterogeneity and output per
corroborating our main results.
month as evidence of real costs to accessing and main-
Second, although our models of duration, which
taining networks with heterogeneous knowledge.
capture the loss of efficiency caused by additional
Finally, the interaction term between task hetero-
multitasking, control for observable and unobservable
geneity and knowledge heterogeneity has a positive time invariant characteristics of recruiters through
and significant association with output per unit time. first differencing, they may not completely control
When heterogeneity is needed (i.e., when task diver- for differences between projects. So we checked the
sity necessitates access to knowledge heterogeneity), robustness of our duration results by specifying a haz-
having access to heterogeneous knowledge improves ard rate model of project completion as a function of
performance. Better fit between task requirements multitasking, project characteristics, and team mem-
and knowledge resources, increased absorptive capac- ber characteristics and estimated the model using data
ity, and multitask learning are all plausible theoretical on projects over the five year period. The team level
explanations for the positive effect of the interaction multitasking variable captures the extent to which
of task heterogeneity and knowledge heterogeneity team members have other commitments during a
on productivity. project measured as the number of other projects
recruiters on a team take on during any given project. implication for managers is that there are likely to
The results, shown in Appendix B Table 2, indicate be optimal levels of multitasking in different infor-
that an additional project taken on by a team member mation work environments. Managers can potentially
slows the project completion rate by approximately discover these optimal conditions through systematic
15%, corroborating the efficiency loss from multitask- trial and error and experimentation.
ing. We also assessed alternative specifications of time Second, our findings contribute to the growing lit-
horizons by estimating standard feasible generalized erature on how changes in work organization com-
least squares (FGLS), fixed, and random effects spec- plement IT investments to improve firm performance.
ifications on daily data. The results also corroborated Although most of the current literature considers
our findings regarding multitasking, duration, and broad aggregates (see Brynjolfsson and Milgrom 2011
output.15 for a review), we provide a micro level explanation
for why a particular work practice, multitasking, com-
plements IT. IT reduces the costs of exchanging infor-
7. Discussion and Conclusion mation, which enables workers to cope with more
As more and more fine grained data become avail- diverse multitasking portfolios. Diverse portfolios are
able on organizational information flows, practices, necessary, along with job rotation and team work, to
and performance, researchers are better able to under- support a firm’s ability to deal with greater demand
stand the nature of knowledge work. Our analy- for product and process variety and for manufac-
sis of detailed data on work practices, email, and turing flexibility. More precisely, we shed light on
output among a group of executive recruiters offers the process through which technology helps work-
two main insights. (1) Recruiters who multitask more ers access the diverse knowledge they need to cope
produce more project output, but only up to a with diverse project multitasking. In our setting,
point, after which they suffer diminishing returns. recruiters who communicate over email with net-
Thus our findings bridge and explain the conflict- work contacts who have heterogeneous knowledge
ing evidence on multitasking. Although multitasking are less productive on average, but more produc-
increases confusion, distraction, and task switching tive when juggling diverse multitasking portfolios.
costs (Rubenstein et al. 2001, Rosen 2008), its benefi- This implies that although heterogeneous knowledge
cial effects on throughput push knowledge workers accessed through email contacts is costly to process
to absorb these costs up to the point of dimin- and maintain, it improves the productivity of work-
ishing returns. (2) Recruiters whose network con- ers who are responsible for diverse tasks. These results
tacts have heterogeneous knowledge are better able imply that productivity may be increased by explic-
to cope with heterogeneous multitasking. For rea- itly encouraging contact between dissimilar employ-
sons of combinatorial synergy, goodness of fit, and ees who juggle diverse multitasking portfolios while
increased absorptive capacity, knowledge heterogene- encouraging domain specific communication between
ity can interact with task heterogeneity to increase specialists.
productivity. These two insights reinforce each other Third, the findings clarify how social networks cre-
in both theory and empirical evidence. In turn, our ate value. Seminal social network theories such as the
research findings have at least three important impli- strength of weak ties (Granovetter 1973) and struc-
cations for research and practice. tural holes (Burt 1992) are predicated on the argument
First, multitasking is a topic of serious debate that ties to disparate parts of a network provide access
among practitioners and academics. Some believe it to heterogeneous knowledge. Most such research
helps productivity, whereas others believe it hurts assumes knowledge heterogeneity adds more value
productivity. Combining the two lines of argument than cost, but this presumption can often be false.
produces a theoretical prediction that the relation- Recent research directly measures the knowledge het-
ship should be concave. At low levels of multitasking, erogeneity workers connect to through diverse social
workers will experience benefits from task comple- networks (Reagans and McEvily 2003, Rodan and
mentarities and smoothing bursty work, leading to Gallunic 2004) and shows that diverse network struc-
increased output from multitasking. However, at high tures actually provide workers with more hetero-
levels of multitasking, the cognitive load is higher and geneous information (Aral and Van Alstyne 2011).
the marginal benefits of smoothing work and learning Prior work assumed that knowledge heterogene-
from other projects are smaller. All that is required ity always helped improve performance. But our
for concavity is that one of these factors is nonlinear, data reveal that the link to performance is contin-
yet theory suggests both might be nonlinear. Indeed, gent on the degree to which the individual needs
this is consistent with our empirical findings. The diverse information. Drawing on theories of common
knowledge (Clark 1996, Cramton 2001, Reagans and
15
These results are available from the authors. McEvily 2003), language in firms (Cremer et al. 2007),
and organizational fit (Morgan 1986, Miller 1992), coarse data at the industry or firm level, researchers
we hypothesized that networks with heterogeneous can exploit the large quantities of data being created
knowledge have costs that can reduce performance. at the level of individual workers and even individual
But we also found that when heterogeneity is needed, tasks and messages. As fine grained data increasingly
i.e., when task diversity necessitates access to knowl- become available, such analyses portend a substantial
edge heterogeneity, having access to heterogeneous improvement in our understanding of the relationship
knowledge improves performance. between information, technology, and value creation.
In sum, the combination of data on individual

worker project completion, email messages, and work Electronic Companion
practices reveals a pattern of relationships among An electronic companion to this paper is available as
multitasking, technology use, and output. The find- part of the online version at http://dx.doi.org/10.1287/
ings can help managers design optimal information isre.1110.0408.
work production processes—specifically, the degree
to which workers should multitask and the circum- Acknowledgments
stances under which putting them in touch with The authors are grateful to seminar participants at the
National Bureau of Economic Research (NBER), the Inter-
diverse communication partners helps or hinders
national Conference on Information Systems (ICIS), the
their multitasking and productivity. Our results sug-
Workshop on Information Systems Economics (WISE), the
gest that managers should match the complexity of Workshop on Information in Networks (WIN), Boston Uni-
knowledge flows to the complexity of task assign- versity, Georgia Tech, Harvard, the London School of Eco-
ments. When adding new tasks, keeping them sim- nomics, MIT, NYU, and Stanford for valuable comments
ilar enables workers to rely on existing information and to the National Science Foundation (Career Awards IIS-
and knowledge flows to raise productivity. But when 9876233 and IIS-0953832 and grant IIS-0085725), Microsoft,
adding dissimilar tasks is unavoidable, matching the Cisco Systems, France Telecom, and the MIT Center for Dig-
heterogeneity of tasks to that of the information ital Business for generous funding. The authors thank Tim
accessed through IT-enabled communication raises Choe, Abraham Evans-El, Meshkat Farrokhzadi, Jia Fazio,
productivity. Job rotation systems that simultaneously Saba Gul, Petch Manoharn, and Jun Zhang for their tireless
research assistance.
increase contact heterogeneity while increasing task
heterogeneity can therefore increase productivity.
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Information, Technology, and Information

lower status employees.2 Once assembled, the team

a productive practice (Lindbeck and Snower 2000). productivity.

Figure 1 Multitasking Profile of Employee #102 (September 5, 2002–November 26, 2002)

CEO (Job class 1); Ann Arbor, MI

Medical Executive (Job class 3); Houma, LA

4.2. Measurement the period from September 5, 2002 to November 26,

Figure 2 Task Heterogeneity of Two Employees

In this measure, qik = nj=1 wij Pjk represents the

Figure 3 Dynamic Email Network of a Subset of the Recruiters Over Time

(a) October 2003

(b) January 2004 66

Table 1 Descriptive Statistics

Variable Obs. Mean SD Min Max

Individual variables (monthly data)

Knowledge Heterogeneity 560 0087 0008 0051 0097

lation between multitasking and output driven by an 4.4. Estimation Procedures

qit =  + 1 mtit + 2 mtit2 + 3 dit + 4 thit + 5 khit

i and thus eliminates potential bias from observed 5. Results

in their careers (e.g., [Pay = f (revenues)] < marginal

The second primary result of our analysis is that 6. Robustness

In sum, the combination of data on individual

ysis. Regional Studies 38(3) 241–253.

You might also like

qit = + 1 mtit + 2 mtit2 + 3 dit + 4 thit + 5 khit

i and thus eliminates potential bias from observed 5. Results