Dynamic incentives in organizations: Success and inertia

Arbeitspapier

We present a dynamic model in which an employee of a firm searches for business projects in a changing environment. It is costly to induce the employee who found a successful project in the past period to search for a new project. Past success can therefore result in profitreducing corporate inertia. Still, when the firm chooses to counteract the reluctance to search by increasing the power of the incentives, it stimulates initial search efforts and results in higher profits. Corporate restructuring and increasing the employee's authority over time are means to alleviate inertia but may undermine initial search incentives.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: KIT Working Paper Series in Economics ; No. 7

Classification and Topics

• Classification: Wirtschaft ; Personnel Management; Executives; Executive Compensation ; Personnel Economics: Labor Management ; Innovation and Invention: Processes and Incentives ; Management of Technological Innovation and R&D
• Subject: incentives in organizations ; inertia ; innovation ; restructuring ; Innovationsmanagement ; Leistungsanreiz ; Organisatorischer Wandel ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ruckes, Martin ; Rønde, Thomas
• Event: Veröffentlichung
• (who): Karlsruher Institut für Technologie (KIT), Institut für Volkswirtschaftslehre (ECON)
• (where): Karlsruhe
• (when): 2010

Further information

• DOI: doi:10.5445/IR/1000020615
• Handle: http://hdl.handle.net/10419/41473
• URN: urn:nbn:de:swb:90-206152
• Last update: 10.03.2025, 11:44 AM CET