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Tailoring incentive systems to a strategic context

Balaji S. Chakravarthy (Associate professor of management, is a specialist in strategic planning at the Wharton School.)
Edward J. Zajac (Doctoral candidate at the school.)

Planning Review

ISSN: 0094-064X

Article publication date: 1 June 1984


The choice of proper incentives is a critical step in designing strategic planning systems. Incentives should integrate the behavior and action of managers with the objectives and strategies of their firms. The problem of inappropriate incentives in various types of organizations has been described by Kerr. While the literature on incentives is voluminous, the linkage between incentives and strategic planning has not been carefully explored. We propose a model that connects a firm's incentive systems with its strategic context, using incentives theory in the economics literature as basic building blocks.


Chakravarthy, B.S. and Zajac, E.J. (1984), "Tailoring incentive systems to a strategic context", Planning Review, Vol. 12 No. 6, pp. 30-35.




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