A micro-economic perspective on manager selection in nonprofit organizations
This paper recognizes that individuals working in the nonprofit sector can have different motives and investigates which type of manager nonprofit organizations should best employ. It first considers a situation in which the manager is allowed to attract only one employee and later extends the analysis to a situation in which up to three employees can be employed. Analyses mark the importance of a strong commitment to the organization's mission and caution for both a strong self-interest and a strong devotion to the well-being of the clients. Managers with a moderate interest in their own objectives can nevertheless be valuable to the organization. The paper also marks why managers should avoid similar-to-me biases in the selection process and investigates the effects of an increased work pressure on the behavior of the managers and on the attainment of the organizational goals.
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- Bebchuk, Lucian A. & Fried, Jesse M., 2003. "Executive Compensation as an Agency Problem," Berkeley Olin Program in Law & Economics, Working Paper Series qt81q3136r, Berkeley Olin Program in Law & Economics.
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- Pauly, Mark V, 1987. "Nonprofit Firms in Medical Markets," American Economic Review, American Economic Association, vol. 77(2), pages 257-62, May.
- Mooney, Gavin & Ryan, Mandy, 1993. "Agency in health care: Getting beyond first principles," Journal of Health Economics, Elsevier, vol. 12(2), pages 125-135, July.
- Handy, Femida & Katz, Eliakim, 1998. "The Wage Differential between Nonprofit Institutions and Corporations: Getting More by Paying Less?," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 246-261, June.
- Ortmann, Andreas & Squire, Richard, 2000. "A game-theoretic explanation of the administrative lattice in institutions of higher learning," Journal of Economic Behavior & Organization, Elsevier, vol. 43(3), pages 377-391, November.
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