Incentivizing centrally regulated units to improve performance: Pitfalls and requirements

Mohsen Afsharian, Heinz Ahn and Emmanuel Thanassoulis

Journal of the Operational Research Society, 2024, vol. 75, issue 2, 395-409

Abstract: This paper explores the foundations for developing incentives for influencing units operating within centrally managed organizations. We begin by laying out the theory of managerial control in principal-agent contexts and draw from the incentive mechanisms developed in the related field of economic regulation. In particular, we highlight issues, differences and similarities in three recently proposed approaches under these circumstances, not only to compare them, but more importantly to motivate and arrive at requirements that should be met by incentivization systems in centrally managed multi-unit organizations. The stipulated requirements are not intended to be exhaustive but rather aim at defining conceptual foundations for further discussions and encouraging avenues for future research in this field. Our investigations are supported by graphical examples and an analysis of empirical data from banking.

Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/01605682.2023.2197931 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:tjorxx:v:75:y:2024:i:2:p:395-409

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/tjor20

DOI: 10.1080/01605682.2023.2197931

Access Statistics for this article

Journal of the Operational Research Society is currently edited by Tom Archibald

More articles in Journal of the Operational Research Society from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().