On the Benefits of Withholding Knowledge in Organizations
AbstractTransferring knowledge to an agent makes him more successful or productive, which is beneficial for the principal. However, knowledge transfer also increases the agent's outside option. I identify two reasons for withholding knowledge — to reduce labor costs within a principal-agent relationship, and to weaken the agent in case of a separation. Moreover, the role of synergy is discussed both for building up a principal-agent relationship and for transferring knowledge. While synergy is decisive for knowledge transfer, cooperation between the principal and agent may even take place in the absence of synergy. Furthermore, I analyze whether the principal is more likely to transfer knowledge to a more able or to a less able agent. Finally, the advantages and disadvantages of a noncompetition clause are briefly discussed.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Journal of the Economics of Business.
Volume (Year): 12 (2005)
Issue (Month): 2 ()
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Find related papers by JEL classification:
- JEL - Labor and Demographic Economics - - - - -
- Cla - Mathematical and Quantitative Methods - - - - -
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
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- Moore, Fiona, 2012. "Identity, knowledge and strategy in the UK subsidiary of an Anglo-German automobile manufacturer," International Business Review, Elsevier, vol. 21(2), pages 281-292.
- Kräkel, Matthias & Sliwka, Dirk, 2006.
"Should You Allow Your Agent to Become Your Competitor? On Non-Compete Agreements in Employment Contracts,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
99, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Kräkel, Matthias & Sliwka, Dirk, 2006. "Should You Allow Your Agent to Become Your Competitor? On Non-Compete Agreements in Employment Contracts," IZA Discussion Papers 2054, Institute for the Study of Labor (IZA).
- Matthias Kräkel & Dirk Sliwka, 2006. "Should You Allow Your Agent to Become Your Competitor? -- On Non-Compete Agreements in Employment Contracts," Bonn Econ Discussion Papers bgse4_2006, University of Bonn, Germany.
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