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 InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 112.
Length: 35 pages
Date of creation: 1961
Date of revision:
Publication status: Published in Management Science (April 1962), 8(3): 325-343
Note: CFP 178.
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Postal: Yale University, Box 208281, New Haven, CT 06520-8281 USA
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Web page: http://cowles.econ.yale.edu/
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
Other versions of this item:
- Martin Shubik, 1962. "Incentives, Decentralized Control, the Assignment of Joint Costs and Internal Pricing," Management Science, INFORMS, vol. 8(3), pages 325-343, April.
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