Institutional Complexity and Managerial Efficiency: A Simple Model
This paper analyzes the relation between resource inputs and managerial effort in firms. The discussion is motivated by a theoretical model that suggests that firms use managerial effort as a substitute of capital resources in the production process. In this framework, different levels of effort are always optimal decisions given its relative cost. Thus, the relatively higher effort exerted by small (compared to big) firms is not a consequence of hidden information or incentive problems in the organization but it is a optimal decision of small firms to offset capital market restrictions. Managers in big firms, on the other hand, are not obliged to offer their maximum personal effort given that it can be more easily substituted by capital resources in the production process.
|Date of creation:||2012|
|Contact details of provider:|| Postal: Via S. Giorgio 12, I-09124 Cagliari|
Web page: http://www.crenos.unica.it/
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"Production, Information Costs and Economic Organizations,"
UCLA Economics Working Papers
10A, UCLA Department of Economics.
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"Management efficiency in football: an empirical analysis of two extreme cases,"
CORE Discussion Papers
2012044, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Miguel Jara & Dimitri Paolini & Juan Dios Tena Horrillo, 2015. "Management Efficiency in Football: An Empirical Analysis of Two Extreme Cases," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 36(5), pages 286-298, 07.
- M. Jara & D. Paolini, 2012. "Management Efficiency in Football: An Empirical Analysis of two Extreme Cases," Working Paper CRENoS 201222, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- Todd R. Zenger, 1994. "Explaining Organizational Diseconomies of Scale in R&D: Agency Problems and the Allocation of Engineering Talent, Ideas, and Effort by Firm Size," Management Science, INFORMS, vol. 40(6), pages 708-729, June.
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Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 4(3), pages 399-426, Fall.
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