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Article
Publication date: 1 September 1996

Kjell Hausken

Lays out a framework for analysing ethics in organizations. Relying on methodological individualism, introduces five building blocks for the framework: self‐interest, individual…

2266

Abstract

Lays out a framework for analysing ethics in organizations. Relying on methodological individualism, introduces five building blocks for the framework: self‐interest, individual rationality, sequential rationality, incentive compatibility, and reputation. Uncritical use of the self‐interest model may induce framing effects, blinding less cautious users to important ethical dimensions. Illustrates the richness and “ethical flavour” of an appropriately considered self‐interest model through focusing one of the individual agent’s real interests in a broad sense, through the use of the time factor in the building blocks, and through suggesting how the individual agent can interpret the value systems in her surroundings.

Details

International Journal of Social Economics, vol. 23 no. 9
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 26 June 2019

Zhixin Chen, Jian Chen, Zhonggen Zhang and Xiaojuan Zhi

The purpose of this paper is to provide a framework to illustrate how network governance based on banks’ e-commerce platform reduces loan risks and mitigates credit rationing in…

Abstract

Purpose

The purpose of this paper is to provide a framework to illustrate how network governance based on banks’ e-commerce platform reduces loan risks and mitigates credit rationing in supply chain financing (SCF).

Design/methodology/approach

The authors conceptualize network governance in terms of authority structure and interorganizational mechanism dimensions, and derive the model of its determinants through arguments drawn from the existing literature. Structural equation modeling is employed to test the theoretical model on data collected from a sample of 271 independent supply chain trading partners in rural China.

Findings

The findings indicate that network governance based on banks’ e-commerce platform could integrate the operations and finances in supply chain management to solve the problems of information asymmetry, costly monitoring, insufficient qualified collaterals and mitigate farmers’ credit rationing. The collaborative credit-granting mechanism and collaborative debt enforcement mechanism formed by the authority structure and interorganizational mechanisms are the key factors to realize the complete compatibility of incentives. The bank e-commerce platform can provide a foundation for the authority structure and interorganizational mechanisms to enhance the predictability of applicants’ transaction and then safeguard the financial exchanges in supply chain.

Practical implications

The research results indicate that it is important to support farmers to establish long-term transaction relationships with leading enterprises through organizational innovation in the development of agricultural industrialization and build a visualization platform for SCF through technological innovation.

Originality/value

This paper contributes to the limited knowledge about network governance mechanisms in SCF by illustrating the model of network governance based on banks’ e-commerce platform and its determinants.

Details

China Agricultural Economic Review, vol. 11 no. 4
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 26 September 2008

Sigmund Wagner‐Tsukamoto

The purpose of the paper is to critically question conventional views of the one‐dimensional, mechanistic and negative image of human nature of Scientific Management. Both for…

24994

Abstract

Purpose

The purpose of the paper is to critically question conventional views of the one‐dimensional, mechanistic and negative image of human nature of Scientific Management. Both for worker behavior and for managerial behavior positive aspects of an image of human nature are reconstructed in organizational economic terms.

Design/methodology/approach

Through institutional economic reconstruction, drawing on the methods and concepts of organizational and institutional economics, the portrayal of workers and managers by Scientific Management is critically assessed.

Findings

It is suggested that a conceptual asymmetry exists in Taylor's writings regarding the portrayal of human nature of workers and managers. Whereas for workers a model of self‐interest was applied (through the concepts of “systematic soldering” and “natural soldiering”), Taylor portrayed managers through a positive, behavioral model of human nature that depicted the manager as “heartily cooperative”. The key thesis is that by modeling managers through a rather positive image of human nature Taylor could no longer methodically apply the model of economic man in order to test out and prevent interaction conflict between potentially self‐interested managers and workers.

Research limitations/implications

The paper focused on Scientific Management to advance the thesis that the portrayal of human nature has been ill approached by management and organization theorists who were apparently pioneering an institutional and organizational economics. Future research has to broaden the scope of research to other pioneers in management and organization research, but also to critics in behavioral sciences, such as organization psychology, who may misunderstand how economics approaches the portrayal of human nature, in particular regarding self‐interest.

Practical implications

Taylor's portrayal of managers as naturally good persons, who were not self‐interested, caused implementation conflict and implementation problems for Scientific Management and led to his summoning by the US Congress. By modeling managers as heartily cooperative, Taylor could no longer analyze potentially self‐interested behavior, even opportunistic behavior of managers in their interactions with workers. Scientific Management had thus no remedy to handle “soldiering” of managers. This insight, that managerialism needs to be accounted for in a management theory, has manifold practical implications for management consultancy, management education, and for the practice of management in general. Students and practitioners have to be informed about the necessary and useful role a model of self‐interest (economic man) methodically plays in economic management theory.

Originality/value

The paper reconstructs the portrayal of human nature in early management theory, which seemingly anticipated the advances – and certain pitfalls – of modern institutional economics. The paper unearths, from an economic perspective, conceptual misunderstandings of Taylor regarding his image of human nature of workers and managers.

Details

Journal of Management History, vol. 14 no. 4
Type: Research Article
ISSN: 1751-1348

Keywords

Article
Publication date: 20 March 2007

Anand Balakrishnan, John M. Clark and Sean P. Salter

Many energy firms currently compensate their risk managers with bonuses based on their ability to outperform a budget benchmark. This creates the incentive for a manager to “let…

Abstract

Purpose

Many energy firms currently compensate their risk managers with bonuses based on their ability to outperform a budget benchmark. This creates the incentive for a manager to “let it ride” (LIR) when prices move adversely to the benchmark, thus exposing the firm to further adverse movements. The purpose of this paper is to present an alternative compensation model based on the adherence to a risk control system utilizing value at risk (VaR). The model is designed to reward the risk manager for staying within the prescribed risk limits, which effectively rewards the manager for taking actions that decrease the deviation from the budget benchmark.Design/methodology/approach – The days within limits (DWL) compensation model is developed with a demonstration of how it works through an illustrative example.Findings – The DWL method of measuring risk and compensating risk managers effectively reduces the potential conflicts of interest from the LIR mentality by establishing strict rules for the risk manager and providing a compensation structure that rewards the manager's ability to stay within the prescribed risk limits.Practical implications – These results should be of great interest to the managers of energy traders as well as to investors in firms participating in energy risk management. Clearly, it is important for energy firms to structure the compensation incentives of its traders such that they act in the best interests of the firm and its investors.Originality/value – This paper develops a compensation model for energy risk managers based on the number of days their DWL remains below their prescribed VR limit.

Details

Managerial Finance, vol. 33 no. 4
Type: Research Article
ISSN: 0307-4358

Keywords

Content available
Book part
Publication date: 26 November 2016

Abstract

Details

The Theory and Practice of Directors’ Remuneration
Type: Book
ISBN: 978-1-78560-683-0

Content available
Book part
Publication date: 30 July 1993

Abstract

Details

Contingent Valuation: A Critical Assessment
Type: Book
ISBN: 978-1-84950-860-5

Book part
Publication date: 17 December 2003

Dong Chen

This paper considers firms’ incentive to preserve compatibility between product generations in a duopoly setting. A firm may or may not maintain backward compatibility depending…

Abstract

This paper considers firms’ incentive to preserve compatibility between product generations in a duopoly setting. A firm may or may not maintain backward compatibility depending on its first period market share. Firms’ compatibility choices consequently will affect their pricing behaviors. Specifically, it is shown that under certain conditions both firms will preserve compatibility and act as local monopolist in the second period. Hence, backward compatibility becomes a tool for firms to relax second period price competition.

Details

Organizing the New Industrial Economy
Type: Book
ISBN: 978-0-76231-081-4

Article
Publication date: 1 June 2002

Maximilian J.B. Hall

Late in 2001, the Financial Services Authority (FSA) introduced a new set of arrangements fordeposit protection in the UK. While the changes involve a welcome improvement on…

Abstract

Late in 2001, the Financial Services Authority (FSA) introduced a new set of arrangements for deposit protection in the UK. While the changes involve a welcome improvement on previous arrangements, much more could be done to enhance their overall cost‐effectiveness. This paper explains the flaws in previous and current arrangements and, using a relatively crude but nevertheless objective measure of the extent of their compliance with International Monetary Fund (IMF) best practice ‘rules’, compares their degree of ‘incentivecompatibility’ (or economic efficiency ‐ ie the extent to which they minimise the problems created by adverse selection, moral hazard and principal/agency conflict) with the counterpart schemes operating elsewhere in the European Union and beyond. In this way, areas for future improvements are identified, which will ideally require accommodating changes in the guiding Deposit Guarantee Schemes Directive.

Details

Journal of Financial Regulation and Compliance, vol. 10 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 23 January 2024

Fan Zhang and Haolin Wen

Based on dual information asymmetry, the two-stage segmented compensation mechanism for technological innovation of civilian enterprises’ participation in military (CEPIM) has…

Abstract

Purpose

Based on dual information asymmetry, the two-stage segmented compensation mechanism for technological innovation of civilian enterprises’ participation in military (CEPIM) has been discussed.

Design/methodology/approach

On the basis of the traditional principal-agent problems, the incentive compatibility condition is introduced as well as the hybrid incentive compensation model is established, to solve optimal solution of the compensation parameters under the dynamic contract condition and the validity is verified by numerical simulation.

Findings

The results show that: (1) The two-stage segmented compensation mechanism has the functions of “self-selection” and “stimulus to the strong”, (2) It promotes the civilian enterprises to obtain more innovation benefit compensation through the second stage, (3) There is an inverted U-shaped relationship between government compensation effectiveness and the innovation ability of compensation objects and (4) The “compensable threshold” and “optimal compensation threshold” should be set, respectively, to assess the applicability and priority of compensation.

Originality/value

In this paper, through numerical simulation, the optimal solution for two-stage segmented compensation, segmented compensation coefficient, expected returns for all parties and excess expected returns have been verified under various information asymmetry. The results show that the mechanism of two-stage segmented compensation can improve the expected returns for both civilian enterprises and the government. However, under dual information asymmetry, for innovation ability of the intended compensation candidates, a “compensation threshold” should be set to determine whether the compensation should be carried out, furthermore an “optimal compensation threshold” should be set to determine the compensation priority.

Article
Publication date: 25 September 2009

Debasis Mishra

332

Abstract

Details

Indian Growth and Development Review, vol. 2 no. 2
Type: Research Article
ISSN: 1753-8254

1 – 10 of over 4000