Download or read book Delegation and Incentive Compensation written by Venky Nagar and published by . This book was released on 2001 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Top management faces two key organizational design choices: (1) how much authority to delegate to lower-level managers, and (2) how to design incentive compensation to ensure that these managers do not misuse their discretion. Although theoretical accounting literature has emphasized the joint nature of these two choices, there is virtually no supporting empirical evidence. Capitalizing on a unique database of branch manager practices in retail banks, this study provides some of the first evidence on the joint nature of the delegation and incentive compensation choices for lower-level managers. A simultaneous model of these two choices indicates that high-growth, volatile, and innovative banks delegate more authority to branch managers. In turn, branch managers with more authority receive more incentive-based pay. However, in contrast with principal-agent theory, I find that the extent of incentive compensation does not play a significant role in explaining the extent of delegation.
Download or read book Impact of Decision right Delegation and Firm Strategies on Line function Managers Performance Evaluation and Incentive Compensation written by Ping Lin and published by . This book was released on 2003 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Handbook of Financial Decision Making written by Gilles Hilary and published by Edward Elgar Publishing. This book was released on 2023-08-14 with total page 463 pages. Available in PDF, EPUB and Kindle. Book excerpt: This accessible Handbook provides an essential entry point for those with an interest in the increasingly complex subject of financial decision making. It sheds light on new paradigms in society and the ways that new tools from private actors have affected financial decision making. Covering a broad range of key topics in the area, leading researchers summarize the state-of-the-art in their respective areas of expertise, delineating their projections for the future.
Download or read book Delegation and Incentives written by Helmut Bester and published by . This book was released on 2007 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Relationship Between Delegation and Incentives Across Occupations written by Jed DeVaro and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: A large literature suggests that incentive pay and delegation of worker authority are positively related. Using data from a large cross section of British establishments, we show that the positive relationship found in the empirical literature masks a stark difference across jobs. Classifying jobs into two categories (complex jobs, including professional, technical and scientific occupations, and simple jobs, consisting of all other non-managerial occupations) we find a positive relationship for simple jobs and a negative relationship for complex jobs. To explain this negative relationship, we develop a model where stronger incentives distort a worker's decisions towards low risk-return tasks.
Download or read book Task Complexity and Incentive Contracting an Empirical Investigation written by Freddy Coronado and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We explore the relation between task complexity, delegation, and incentive compensation. Conventional agency theory posits that task complexity increases the noise in performance measures and is hence associated with lower incentive compensation. However, Prendergast (2002) argues that task complexity increases the value of the manager's specific knowledge and increases the value of delegation and commensurately, the need to use incentive compensation. We use data from 145 for-profit hospitals to test these competing theories and explore outsourcing as an alternative to managerial delegation. We define delegation as the range of activities overseen by the manager. Holding the noise of performance measures constant, if outsourcing is a more efficient response to increases in task complexity, then task complexity should increase outsourcing and consequently decrease delegation, and thereby decrease the need for incentive compensation. Our empirical results support these predictions. First, we find the expected positive effect of task complexity on performance measure noise. Second, using two-stage least squares (2SLS) we find that delegation is positively associated the use of incentive compensation. Finally, we find that task complexity is negatively associated with delegation, consistent with the use of outsourcing as a more efficient mechanism to deal with contracting in the presence of task complexity.
Download or read book Incentive Compensation and Complex Outsourcing written by Angie M. Abdel Zaher and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study addresses the relationship between incentive compensation and complex outsourcing in somewhat different vein. The agency theory suggests, firstly that managers are constantly faced with allocation of efforts and choices and within this context their decisions are driven by incentive compensation. Secondly, task complexity increases the noise associated with performance measures and is negatively related to incentive compensation. The literature findings suggest that when firms are confronted with complex tasks, it is better for the firm to delegate the task to the manager with strong incentive contracts in place. We extend these findings by testing outsourcing as an alternative choice for a risk-averse manager when faced with complex tasks in an uncertain environment. This study further places CEO turnover, firm characteristics, and financial indicators into focus to test the association between outsourcing decisions and CEO compensation. Prendergast's (2002) framework is used to examine whether outsourcing plays a mediating role between task complexity and incentive contracting. The study proposes the delegation of complex tasks as a means to align the agents' interests with those of the principals'
Download or read book Price Delegation and Performance Pay written by Desmond (Ho-Fu) Lo and published by . This book was released on 2015 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: Delegation is a central feature of organizational design that theory suggests should be aligned with the intensity of incentives in performance pay schemes. We explore a specific form of delegation, namely price delegation, whereby firms allow sales people to offer a maximum discount from the list price to their customers. We first develop a model of the price delegation decision based on the notions of information acquisition and constrained delegation that match the context of industrial sales. Using data on individual sales people, specifically one sales person per firm from a survey of 261 firms, we show that, consistent with predictions from our model, sales people are given more pricing authority when they are more experienced and more capable, when there is less environmental uncertainty, and to a lesser extent, when customer valuations for the product are more variable. Finally, also consistent with the predictions of our model, we show that price delegation is increasing in the intensity of incentives given to the agent.
Download or read book The Book on Incentive Compensation Management written by David Kelly and published by Lulu.com. This book was released on 2014-04-10 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt: Making Incentive Compensation Management - ICM - projects and operations more successful.
Download or read book Capital Allocation and Delegation of Decision making Authority Within Firms written by John R. Graham and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We survey more than 1,000 CEOs and CFOs to understand how capital is allocated, and decision-making authority is delegated, within firms. We find that CEOs are least likely to share or delegate decision-making authority in mergers and acquisitions, relative to delegation of capital structure, payout, investment, and capital allocation decisions. We also find that CEOs are more likely to delegate decision authority when the firm is large or complex. Delegation is less likely when the CEO is particularly knowledgeable about a project, when the CEO has an MBA degree or long tenure, and when the CEO's pay is tilted towards incentive compensation. We study capital allocation in detail and learn that most companies allocate funds across divisions using the net present value rule, the reputation of the divisional manager, the timing of a project"s cash flows, and senior management's "gut feel." Corporate politics and corporate socialism are more important allocation criteria in foreign countries than in the U.S.
Download or read book United States Code written by United States and published by . This book was released on 2008 with total page 888 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Handbook of Labor Economics written by Orley Ashenfelter and published by Elsevier. This book was released on 2010-10-27 with total page 1140 pages. Available in PDF, EPUB and Kindle. Book excerpt: What factors affect the ways individuals participate in labor markets?New Developments and Research on Labor Markets (volume 4B) proposes answers to this and other questions on important topics of public policy. Leading labor economists demonstrate how better data and advanced experiments help them apply economic theory, yielding sharper analyses and conclusions. The combinations of these improved empirical findings with new models enable the authors of these chapters to reveal how labor economists are developing new and innovative ways to measure key parameters and test important hypotheses. - Concentrates on empirical research in specific labor markets, including those defined by age, gender, and race - Reveals how questions and answers about these markets have changed and how models measure them - Documents how conceptual models and empirical work explain important practical issues
Download or read book Authority and Incentives in Organizations written by Matthias Kräkel and published by . This book was released on 2013 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper analyzes how the choice of organizational structure leads to the best compromise between controlling behavior based on authority rights and minimizing costs for implementing high efforts. Concentrated delegation and hierarchical delegation turn out to be never an optimal compromise. If the CEO is more efficient than the division heads (i.e., the CEO's costs from exerting high effort are smaller than those of the division heads), the owner will prefer full delegation to the divisions to replace high incentive pay to the division heads by incentives based on private benefits of control. In that situation, decentralization is the optimal form of full delegation given that selfish behavior is more important than cooperation, but cross-authority delegation is optimal for cooperation being crucial. If, however, the division heads are clearly more efficient than the CEO, the owner will choose centralization given that cooperation is the dominating issue, but partial delegation if selfish behavior is crucial.
Download or read book Delegation and Empowerment written by Matthias Heerd and published by GRIN Verlag. This book was released on 2012-10-04 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2011 in the subject Business economics - Business Management, Corporate Governance, grade: 2,0, University of Applied Sciences Frankfurt am Main, course: MBA in Aviation Management, language: English, abstract: In the course of increasing global competition and cost pressure, companies are constantly forced to become more efficient. Reducing overhead, the number of employees and the streamlining of business units are measures that most companies have used since the early 90’s, both to ensure their survival and to increase shareholder value. While jobs have been cut, workload in general has rather increased than decreased, with the consequence that less people are left with more work. This holds especially true for the management layer, in which a substitution of human work by machines is not possible. These developments pose the question of how managers in the streamlined businesses of today can cope with the increasing workload, complexities and responsibilities. Delegation & empowerment surely play a major role. A proper application needs to be assured not only for the sake of the company and management but also for the employees whose motivation and performance largely depend on how capable their superiors are in delegating effectively. Therefore it makes sense to analyze how these tools work and how to make best use of them for the mutual benefit of everyone. 1.2 Objective and scope of work The goal of this paper is to give the reader a general understanding of what delegation & empowerment is about. For this purpose, it is first of all necessary to establish clarity about the two terms. Therefore, paragraph 2 deals with the evaluation of different definitions from experts in order to find a clear separation between delegation & empowerment. In the following examination, the reader is supposed to understand the benefits of delegation & empowerment (paragraph 3) and what prerequisites need to be fulfilled to make best use of the tools (paragraph 4). After the description of common pitfalls with possible solutions, paragraph 6 gives clear guidelines for proper delegation in the style of a manager’s user manual. The seventh chapter finally shows the limits of delegation & empowerment.
Download or read book Delegation and Strategic Compensation in Tournaments written by Matthias Kräkel and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper considers a two-stage game with two owners and two managers. On the first stage, the owners choose a linear combination of profits and sales as incentives for their managers. On the second stage, the two managers compete in a tournament against each other. In a symmetric equilibrium, both owners induce their managers to maximize profits. In asymmetric equilibria, however, one owner puts a positive weight on sales and the other a negative weight.
Download or read book Delegation and Dynamic Incentives written by Dongsoo Shin and published by . This book was released on 2014 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using an agency model, we show how delegation, by generating additional private information, improves dynamic incentives under limited commitment. It circumvents ratchet effects and facilitates the revelation of persistent private information through two effects: a play-hardball effect, which mitigates an efficient agent's ratchet incentive, and a carrot effect which reduces an inefficient agent's take-the-money-and-run incentive. Although delegation entails a loss of control, it is optimal when uncertainty about operational efficiency is large. Moreover, delegation is more effective with production complementarity. We also consider different modes of commitment to yield insights into optimal organizational boundaries.
Download or read book Strategic Delegation by Unobservable Incentive Contracts written by and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
