Incentives, Decentralized Control, the Assignment of Joint Costs and Internal Pricing
AbstractA goal of good management should be to design a reward system for those who take risks in making decisions in such a manner that the rewards to the individual correlate positively with the worth of the decision to the organization (taking into account the attitude of the top management to variance as well as to expected gain). In many organizations cost accounting supplies much of the information used for control at several levels. In this paper we examine some of the control problems that arise if joint costs are assigned by various cost accounting and some internal pricing conventions.
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Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 8 (1962)
Issue (Month): 3 (April)
Other versions of this item:
- Martin Shubik, 1961. "Incentives, Decentralized Control, the Assignment of Joint Costs and Internal Pricing," Cowles Foundation Discussion Papers 112, Cowles Foundation for Research in Economics, Yale University.
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