Motivating Through Delegating Tasks or Giving Attention

An important role of managers is to motivate subordinates. Monetaryrewards have been the focus of economic analysis. Managers alsouse other means to influence subordinates. If a manager canbetter assess the subordinate's ability than the subordinatehimself, and if ability and effort are complements, the managerfinds it hard not to overstate a junior's ability. Talk is cheap.We analyze under what conditions a manager can use organizationalpractices such as delegation and the selective provision ofattention to credibly communicate his assessment. We comparetheir desirability. Delegation is preferable in case the manager'sassessment is fairly accurate; attention is inescapable if itis inaccurate.     

In Defense of Boards

It is often assumed that bad corporate performance means a bad CEO. The task of a board of directors is then simple: dismiss the executive. If it fails to do so, the board is said to be indolent. We take a kinder approach to observed board behavior and point to the problems even well-intended boards would encounter. They face the twin task of disciplining and screening executives. We analyze the nature of the retention contract a board uses to discipline and screen executives. Consistent with empirical observation, we find that executives may become overly active to show their credentials, and that the link between bad performance and dismissal is weak.     

Confidence Management: On Interpersonal Comparisons in Teams

Organizations differ in the degree to which they differentiate employees by ability. We analyze how the effect of differentiation on employee morale may explain this variation. We characterize sufficient conditions for the manager to refrain from differentiation. She refrains from differentiation when employees are of similar ability, especially if absolute levels are high. Avoiding differentiation boosts the self‐image of employees. To limit the negative effects of differentiation, the manager's strategy often relies on the coarsest message set possible. The likelihood that the manager differentiates depends on the presence of synergies between employees and on the convexity of the cost of effort function. Finally, we show that in the absence of commitment no differentiation is chosen too often.     

Is Transparency To No Avail?*

Transparent decision‐making processes are widely regarded as a prerequisite for the working of a representative democracy. It facilitates accountability, and citizens might suspect that decisions, if taken behind closed doors, do not promote their interests. Why else would there be the secrecy? We provide a model of committee decision‐making that explains the public's demand for transparency, and committee members' aversion to it. In line with case study evidence, we show how pressures to become transparent induce committee members to organize pre‐meetings away from the public eye. Transparency does not improve accountability, but it might improve the decision.     

Relational trust and new ventures’ performance: the moderating impact of national-level institutional weakness

This study investigates the link between relational trust in exchange partners and new venture performance, and determines whether weakness in national-level formal institutions influences this link. Based on a sample of 203 entrepreneurs and their new ventures from Germany and China, findings reinforce the idea that new venture performance may profit from relational trust in exchange partners. However, interaction analyses also reveal that the performance implications of relational trust are contingent on the institutional context. The contributions and implications of these findings are discussed.