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Biased managers, organizational design, and incentive provision

Costa, Cristiano M., Ferreira, Daniel and Moreira, Humberto (2005) Biased managers, organizational design, and incentive provision. Economics Letters, 86 (3). pp. 379-385. ISSN 0165-1765

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Identification Number: 10.1016/j.econlet.2004.10.001


We model the tradeoff between the balance and the strength of incentives implicit in the choice between hierarchical and matrix organizational structures. We show that managerial biases determine which structure is optimal: hierarchical forms are preferred when biases are low, while matrix structures are preferred when biases are high.

Item Type: Article
Official URL:
Additional Information: © 2005 Elsevier
Divisions: Finance
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
JEL classification: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior
M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M11 - Production Management
Sets: Departments > Finance
Collections > Economists Online
Date Deposited: 01 Dec 2011 16:48
Last Modified: 20 Mar 2021 01:27

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