Organizational Concealment: An Incentive of Reducing the Responsibility

Tomoya Tajika and 智哉 多鹿

No 667, Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: We studyworkers’ incentives of reporting problems within an OLG organization consisting of a subordinate and a manager. The subordinate is responsible for reporting a problem, and the manager is responsible for solving the reported problem. The subordinate has an incentive to conceal a detected problem since if he reports it but the manager is too lazy to solve the problem, the responsibility is transferred to the subordinate since he becomes a manager in the next period. We show that concealment is more likely either if subordinates are farsighted or the problem’s growth rate increases over time.

Keywords: Concealment; overlapping generations; promotion; reducing the responsibility (search for similar items in EconPapers)
JEL-codes: D23 D82 M51 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2017-11
New Economics Papers: this item is included in nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hituec:667

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