The Theory of Incentive

Kazuhito Isomura ()
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Kazuhito Isomura: Chuo University

Chapter Chapter 3 in Management Theory by Chester Barnard, 2021, pp 21-35 from Springer

Abstract: Abstract The theory of incentive is mainly related to a willingness to cooperate that is the condition of establishing a formal organization. The formal organization depends upon individuals’ willingness to cooperate and their contributions to the formal organization. Therefore, individuals are a strategic factor in the formal organization. The formal organization is continuously required to attract individuals and elicit their contributions. Individuals’ contributions are basically induced by incentives. They have their own individual motives, and the formal organization needs to provide incentives appropriate to them. When incentives are greater than individuals’ contributions, individuals decide to join the formal organization and contribute to it. Thus, the formal organization has to produce and distribute sufficient incentives to contributors. This chapter first examines the significance of incentives, then shows different types of incentive. Subsequently, it explains two methods to induce individuals’ contributions: incentives and persuasion. Finally, the chapter argues how to construct the economy of incentives to increase organization efficiency.

Keywords: Willingness to cooperate; Effectiveness; Efficiency; Incentive; Contribution; Persuasion; Economy of incentive (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spbrcp:978-981-16-2979-2_3

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DOI: 10.1007/978-981-16-2979-2_3

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