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Employee Initiative and Managerial Control

Employee Initiative and Managerial Control Abstract I analyze the impact of managerial involvement and the allocation of authority on employee initiative in a setting where both a manager and an employee can originate new ideas for implementation. I show that employee initiative is maximized through the combination of formal authority and limited but positive levels of involvement by the manager, a result which thus qualifies the motivational advantages of both formal delegation and a hands-off management strategy. This result arises through an indirect monitoring role played by managerial involvement that has been absent in previous frameworks, and the implications of which for the optimal organizational arrangement are further analyzed. (JEL D23, M12, M54 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Microeconomics American Economic Association

Employee Initiative and Managerial Control

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Publisher
American Economic Association
Copyright
Copyright © 2012 by the American Economic Association
Subject
Articles
ISSN
1945-7685
eISSN
1945-7685
DOI
10.1257/mic.4.3.171
Publisher site
See Article on Publisher Site

Abstract

Abstract I analyze the impact of managerial involvement and the allocation of authority on employee initiative in a setting where both a manager and an employee can originate new ideas for implementation. I show that employee initiative is maximized through the combination of formal authority and limited but positive levels of involvement by the manager, a result which thus qualifies the motivational advantages of both formal delegation and a hands-off management strategy. This result arises through an indirect monitoring role played by managerial involvement that has been absent in previous frameworks, and the implications of which for the optimal organizational arrangement are further analyzed. (JEL D23, M12, M54 )

Journal

American Economic Journal: MicroeconomicsAmerican Economic Association

Published: Aug 1, 2012

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