Tom Schwantje is a Postdoctoral Research Fellow at Bocconi University.
The paper discussed in this episode is this one.
Organisations face a trade-off when appointing and delegating power to middle managers.
On the one hand, the manager may take decisions that are not beneficial to the organisation. On the other hand, the manager may have better local information. In multi-ethnic countries this trade-off shapes whether the organisation may want to appoint a manager co-ethnic to the market served or co-ethnic to the organisation itself. This is studied in the context of Ethiopia, where an unexpected civil war increased the salience of ethnicity.