Motivation of company's top managers during implementation of an innovational project: financial and non-financial constituents

Viktor P. Kuznetsov, Sergey N. Yashin, Egor V. Koshelev, Dmitry V. Podshibyakin and Anastasia O. Egorova

International Journal of Trade and Global Markets, 2017, vol. 10, issue 2/3, 186-197

Abstract: The matter of a top manager's motivation is adapted to the consumer behaviour theory. The problem of bringing a non-financial motivation to a financial one may be solved with a certain error. This problem may be overcome by introducing a special metric of utility functions. For that end, the problem has been transferred to a space consisting of utility functions. The problem solution turns out to be a circle with a center at the reference point. It has been established that the financial resources allocated by a company for motivation are presentable in a graphical format by means of a line similar to the budget line reviewed in the consumer behavior theory. The obtained results are used to define a motivational optimum by analogy with the consumer optimum that is already well-known in the economic science. For an innovative project implemented in a company, an optimal value of net present value (NPV) is produced resulting in structuring an efficient motivation system for a top manager who becomes a 'friend' to the company in this case. It has been proven that the desired equilibrium value of NPV is in direct relationship to the bonus fund owned by the company.

Keywords: financial motivation; metric of utility functions; motivation of top managers; motivational optimum; non-financial motivation; optimal NPV. (search for similar items in EconPapers)
Date: 2017
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