Managerial performance evaluation and organizational form

IF 3.2 3区 管理学 Q1 BUSINESS, FINANCE
Michael Krapp, Wolfgang Schultze, Andreas Weiler
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引用次数: 0

Abstract

We study the relative efficiency of centralized versus decentralized organizational forms given optimized managerial performance evaluation within an incomplete contracting framework with risk-averse agents under moral hazard. Decentralization and performance evaluation are complementary control choices and the efficiency of an organizational form depends on the design of performance evaluation. Divisions can make relationship-specific investments that not only improve firm performance, but also increase compensation risk. We find that pure divisional performance evaluation is optimal under centralization, whereas under decentralization, optimal compensation contracts include a combination of divisional and firm-wide performance evaluation. When comparing both organizational forms, we find that the optimal form depends on managers’ degree of risk-aversion and the uncertainty of the business environment. Contrary to previous literature, we find that centralization dominates in many situations, particularly at high degrees of risk-aversion and high uncertainty.

Abstract Image

管理绩效评估和组织形式
我们研究了在道德风险下,在风险规避主体的不完全契约框架下,在优化管理绩效评估的情况下,集中与分散组织形式的相对效率。权力下放和绩效评估是相辅相成的控制选择,组织形式的效率取决于绩效评估的设计。部门可以进行特定于关系的投资,不仅可以提高公司业绩,还可以增加薪酬风险。我们发现,在集中化的情况下,纯粹的部门绩效评估是最优的,而在分散化的情况中,最优薪酬合同包括部门和整个公司的绩效评估。在比较两种组织形式时,我们发现最佳形式取决于管理者的风险规避程度和商业环境的不确定性。与以前的文献相反,我们发现集中在许多情况下占主导地位,特别是在高度厌恶风险和高度不确定性的情况下。
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来源期刊
CiteScore
6.20
自引率
11.10%
发文量
97
期刊介绍: Contemporary Accounting Research (CAR) is the premiere research journal of the Canadian Academic Accounting Association, which publishes leading- edge research that contributes to our understanding of all aspects of accounting"s role within organizations, markets or society. Canadian based, increasingly global in scope, CAR seeks to reflect the geographical and intellectual diversity in accounting research. To accomplish this, CAR will continue to publish in its traditional areas of excellence, while seeking to more fully represent other research streams in its pages, so as to continue and expand its tradition of excellence.
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