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Biased managers, organizational design, and incentive provision

By Cristiano M. Costa, Daniel Ferreira and Humberto Moreira

Abstract

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

Topics: HD28 Management. Industrial Management
Publisher: Elsevier
Year: 2005
DOI identifier: 10.1016/j.econlet.2004.10.001
OAI identifier: oai:eprints.lse.ac.uk:39856
Provided by: LSE Research Online
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