Managerial dilemmas : the political economy of hierarchy

In organisation theory a schism has developed between the traditional organisational behaviour literature, based in psychology, sociology and political science, and the more analytically rigorous field of organisational 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 organisation. Applying game theory to the analysis of the roles of cooperation and political leadership in organisational hierarchies, he concludes that the organisation whose managers can inspire cooperation and the transcendence of short-term interest in its employees enjoys a competitive advantage.

• List of tables and figures
• Series editors' preface
• Acknowledgements
• Part I. Why Have Hierarchy?: 1. Market failures and hierarchical solutions: the tension between individual and social rationality
• 2. Bargaining failure: coordination, bargaining, and contracts
• 3. Voting failure: social choice in a dictatorial hierarchy
• Part II. Managerial Dilemmas: 4. Horizontal dilemmas: social choice in a decentralised hierarchy
• 5. Vertical dilemmas: piece-rate incentives and credible commitments
• 6. Hidden action in hierarchies: principals, agents, and teams
• 7. Hidden information in hierarchies: the logical limits of mechanism design
• 8. Hierarchical failures and market solutions: can competition create efficient incentives for managers? Part III. Cooperation and Leadership: 9. The possibilities of cooperation: repeated vertical dilemmas
• 10. The indeterminacy of cooperation: conventions, culture, and commitments
• 11. The political economy of hierarchy: commitment, leadership and property rights
• Epilogue: politics, rationality, and efficiency
• References
• Name index
• Subject index.