Insight into company : delegation? centralization?

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dc.contributor University of Helsinki, Faculty of Social Sciences, Department of Political Science en
dc.contributor Helsingin yliopisto, Valtiotieteellinen tiedekunta, Yleisen valtio-opin laitos fi
dc.contributor Helsingfors universitet, Statsvetenskapliga fakulteten, Institutionen för allmän statslära sv
dc.contributor.author Sun, Susan Huying
dc.date.accessioned 2009-09-08T09:22:49Z
dc.date.available 2009-09-08T09:22:49Z
dc.date.issued 2008-05-12
dc.identifier.uri http://hdl.handle.net/10138/10010
dc.description Endast sammandrag. Inbundna avhandlingar kan sökas i Helka-databasen (http://www.helsinki.fi/helka). Elektroniska kopior av avhandlingar finns antingen öppet på nätet eller endast tillgängliga i bibliotekets avhandlingsterminaler. sv
dc.description Only abstract. Paper copies of master’s theses are listed in the Helka database (http://www.helsinki.fi/helka). Electronic copies of master’s theses are either available as open access or only on thesis terminals in the Helsinki University Library. en
dc.description Vain tiivistelmä. Sidottujen gradujen saatavuuden voit tarkistaa Helka-tietokannasta (http://www.helsinki.fi/helka). Digitaaliset gradut voivat olla luettavissa avoimesti verkossa tai rajoitetusti kirjaston opinnäytekioskeilla. fi
dc.description.abstract This paper is about delegation within organization, more precisely, within company. The key questions are i) what is the principal's optimal choice of authority allocation and ii) what factors influence the authority allocation in the scenarios of i) none of the two parties holds private information on projects; ii) the agent is better informed on projects and his information cannot be elicited. The thinking is based on the assumption that the principal always seeks to increase the agent's initiative and maximize own expected utility. Based on Principal-agent theory, two trade-offs are studied. One is losing control versus incentive. The principal raises the agent's incentive by delegating the decision rights to him. However, delegation may result in loss of control. Another trade-off is delegation versus communication. When a non-congruent agent holds private information and the principal holds authority, the agent may start strategic communication by adding noise into his communication. The trade-off is same as this question: whether the principal should delegate decision rights to an agent who has different preference with hers, or keep decision rights and make decision based on noisy communication? The study shows that delegation is always optimal as long as the difference between the principal and agent's preferences is not too large. The authority is more likely to be delegated on decisions (i) that are relatively unimportant for the principal; (ii) for which the principal can trust the agent; (iii) that are important to the agent, either because private benefits are high or because the principal cannot hurt the agent's initiative by overruling his decisions; (iv) that are new enough to the principal, so new that she does not have enough expertise or competency on it; (v) that the agent holds private information which is not elicitable. When delegation is not feasible, there are several factors which may increase a subordinate's real authority. They are (i) multiple agents; (ii) urgency of decisions; (iii) reputation for moderate interventionism; (iv) monetary incentive to the agent; (v)multiple principals. en
dc.language.iso fi
dc.subject delegation en
dc.subject principal-agent theory en
dc.subject incentive en
dc.subject communication en
dc.subject centralization en
dc.subject yritykset fi
dc.subject delegointi fi
dc.subject päätösvalta fi
dc.subject kannustimet fi
dc.title Insight into company : delegation? centralization? en
dc.identifier.laitoskoodi 711
dc.type.ontasot master's thesis en
dc.type.ontasot pro gradu -tutkielmat fi
dc.type.ontasot pro gradu-avhandlingar sv
dc.type.dcmitype Text
dc.format.content abstractOnly

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