Managerial Dilemmas: The Political Economy of Hierarchy

by Gary J. Miller

• ISBN13: 9780521457699
• ISBN10: 0521457696
• Edition: Reprint
• Format: Paperback
• Copyright: 1993-09-24
• Publisher: Cambridge University Press

Summary

In organization theory a schism has developed between the traditional organizational behavior literature, based in psychology, sociology and political science, and the more analytically rigorous field of organizational economics. The former stresses the importance of managerial leadership and cooperation among employees, while the latter focuses on the engineering of incentive systems that will induce efficiency, and profitability, by rewarding worker self-interest. In this innovative book, Gary Miller bridges the gap between these literatures. He demonstrates that it is impossible to design an incentive system based on self-interest that will effectively discipline all subordinates and superiors and obviate or overcome the roles of political conflict, collective action, and leadership in an organization. Applying game theory to the analysis of the roles of cooperation and political leadership in organizational hierarchies, he concludes that the organization whose managers can inspire cooperation and the transcendence of short-term interest in its employees enjoys a competitive advantage.

Table of Contents

List of tables and figures	ix
Series editors' preface	xi
Acknowledgments	xiii
Introduction	1	(14)
PART I WHY HAVE HIERARCHY?	15	(60)
Market failures and hierarchical solutions: the tension between individual and social rationality	19	(17)
Bargaining failure: coordination, bargaining, and contracts	36	(22)
Voting failure: social choice in a dictatorial hierarchy	58	(17)
PART II MANAGERIAL DILEMMAS	75	(104)
Horizontal dilemmas: social choice in a decentralized hierarchy	77	(25)
Vertical dilemmas: piece-rate incentives and credible commitments	102	(18)
Hidden action in hierarchies: principals, agents, and teams	120	(18)
Hidden information in hierarchies: the logical limits of mechanism design	138	(21)
Hierarchical failures and market solutions: can competition create efficient incentives for hierarchy?	159	(20)
PART III COOPERATION AND LEADERSHIP	179	(56)
The possibilities of cooperation: repeated vertical dilemmas	182	(17)
The indeterminacy of cooperation: conventions, culture, and commitment	199	(17)
The political economy of hierarchy: commitment, leadership, and property rights	216	(19)
Epilogue: politics, rationality, and efficiency	235	(4)
References	239	(8)
Name Index	247	(3)
Subject Index	250