The allocation of control in organizations.

摘要

An important problem many organizations face, in addition to designing the incentive compensation of their members, is determining who should be in charge of what decisions. The allocation of decision-making, the structure of rewards and penalties, and potentially conflicting heterogeneous interests jointly determine whether or not efficient decisions are made, and thus the long-run success of the organization.; I develop a model in which the concepts of control and authority emerge naturally from the asymmetry of information between a principal and an agent, without necessarily assuming that contracts are incomplete. To benefit from the agent's superior information, the principal must give the agent some degree of decision-making authority. The extent of that authority depends on the value of the agent's information and the cost of the incentives necessary to ensure that the agent does not abuse his power.; Career concerns lower the cost of incentives. However, they may cause the agent to ignore valuable private information and take conservative courses of action, undermining the rationale for delegating control in the first place. The model thus implies that the tendency to herd leads to less decentralization of decision-making. The principal can eliminate this conservative bias by using long-term contracts, which reward successful agents with greater future compensation and authority than would otherwise be optimal purely on the basis of the agent's ability. Also, since performance is more informative about the quality of the agent's information when the agent has more control, the principal delegates additional authority early in the relationship to screen for informed agents.; When two agents share a common intangible asset, such as a brand name, the decisions made by one agent affect the revenues generated by the other. The externality raises the cost of incentives, and leads to further restrictions on the agents' discretion. Interestingly, when the externality is strong and the value of the agents' superior information modest, the principal grants one agent substantially less authority than the other. The model therefore predicts that the dichotomous ownership in franchise chains may arise even if all units are identical.