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Decision Initiation, Decision Implementation, and the Allocation of Decision Rights

Author

Listed:
  • Randolph Sloof

    (University of Amsterdam, the Netherlands)

  • Ferdinand A. von Siemens

    (Goethe University Frankfurt, Germany)

Abstract

Organizations must not only take the right decisions, they must also ensure that these decisions are effectively implemented. Fama and Jensen (1983) argue that the same members of many organization are often responsible for both decision initiation and implementation. If these have social preferences, they might thus sabotage both project choices and implementation to express their discontent with the allocation of decision rights. How decisions come about also affects implementation if workers have reciprocal fairness concerns. Our experimental evidence demonstrates that the possibility to sabotage implementation leads to more delegation, but only if workers have high costs of obstructing informed decisions. We further find that the allocation of authority as such affects implementation.

Suggested Citation

  • Randolph Sloof & Ferdinand A. von Siemens, 2015. "Decision Initiation, Decision Implementation, and the Allocation of Decision Rights," Tinbergen Institute Discussion Papers 15-105/VII, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20150105
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    File URL: https://papers.tinbergen.nl/15105.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Delegation; Implementation; Procedural Preferences; Reciprocity;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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