Authority and Incentives in Organizations

摘要: The paper analyzes the choice of organizational structure as solution to trade-off between controlling behavior based on authority rights and minimizing costs for implementing high efforts. analysis includes owner a firm, top manager two division heads. If it is more expensive incentivize heads, will prefer full delegation them replace their incentive pay by incentives private benefits control. In that situation, decentralization optimal given selfish important than cooperation maximizing returns, but concentrated single head being crucial. If, however, incentivizing heads clearly less creating manager, choose centralization dominating issue, partial if