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A micro-economic perspective on manager selection in nonprofit organizations

  • Caers, Ralf
  • Du Bois, Cindy
  • Jegers, Marc
  • De Gieter, Sara
  • De Cooman, Rein
  • Pepermans, Roland
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    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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    Article provided by Elsevier in its journal European Journal of Operational Research.

    Volume (Year): 192 (2009)
    Issue (Month): 1 (January)
    Pages: 173-197

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    Handle: RePEc:eee:ejores:v:192:y:2009:i:1:p:173-197
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    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    2. Shleifer, Andrei & Vishny, Robert W, 1997. " A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-83, June.
    3. Bebchuk, Lucian Arye & Fried, Jesse, 2003. "Executive Compensation as an Agency Problem," CEPR Discussion Papers 3961, C.E.P.R. Discussion Papers.
    4. 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.
    5. 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.
    6. 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.
    7. Pauly, Mark V, 1987. "Nonprofit Firms in Medical Markets," American Economic Review, American Economic Association, vol. 77(2), pages 257-62, May.
    8. 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.
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