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

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Organizations must not only take the right decisions, they must also ensure that these decisions are effectively implemented. Fama & 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. Terms of use: Documents inJEL-Code: C910, D230, D860, L200.

Communication Versus (Restricted) Delegation: An Experimental Comparison

“…2 Closer to our study are experiments that study the informational role of delegation. 3 Fehr et al (2013), Dominguez-Martinez et al (2014) and Sloof and von Siemens (2015) focus on the motivational consequences of (e¤ective) delegation and examine a setup based on Aghion and Tirole (1997) in which the worker has to exert costly e¤ort to become informed. If the manager keeps authority or closely monitors the worker, the worker has weakened incentives to gather information, leading to a loss of initiative.…”