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Managerial Influence and Organizational Performance

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  • Heikki Rantakari

Abstract

Agents need to be motivated to develop ideas and to share information regarding their potential value. When the agents fail to agree on which alternative to implement, the principal needs to decide how to resolve the disagreement. When the agents’ information is soft, favoring one of the agents in the case of disagreement is always optimal in the present setting. In contrast, if the information is hard, a balanced treatment of the agents is preferred to encourage competition. The reason for the difference is the high cost of sustaining both informative communication and effort in a balanced organization.

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  • Heikki Rantakari, 2021. "Managerial Influence and Organizational Performance," Journal of the European Economic Association, European Economic Association, vol. 19(2), pages 1116-1161.
    • Handle: RePEc:oup:jeurec:v:19:y:2021:i:2:p:1116-1161.
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    File URL: http://hdl.handle.net/10.1093/jeea/jvaa023
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