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Delegation Decisions Based On Agent's Behavioral Motivation

Posted on:2004-06-12Degree:DoctorType:Dissertation
Country:ChinaCandidate:G Q ZhaoFull Text:PDF
GTID:1116360122970357Subject:Technical Economics and Management
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This paper studied the problems of authority and delegation in organizations from the aspect of individual's behavioral motivation. Especially, it introduced intrinsic motivation into incentive mechanism, systematically discussed the relationship between intrinsic motivation and authority and delegation in organizations. It brought forward the effective conditions for delegation and discussed how to motivate individuals effectively from the aspect of intrinsic motivation. The theoretic basis of the research is game theory and the principal-agent theory in information economics and the theories of human resource management. The main questions included are as follow: discussing the relationship of intrinsic motivation and extrinsic incentive, finding out the status of intrinsic motivation and extrinsic incentive in incentive mechanism; studying the influence and effect of intrinsic motivation on delegation decision; setting forth the material foundation of authority and discussing goal incentive; analyzing how to evaluate intrinsic motivation and its effect in incentive mechanism, unveiling the internal principles of kinds of incentive phenomena in management; presenting the resource-collocation theory of authority and delegation in organizations; expatiating the thought of human resource center in firms. Individual's behavior is the embodiment of and affected by both intrinsic and extrinsic motivation. This paper presents the effect of intrinsic motivation to individual's behavior and incentive mechanism design. By modeling analysis, we found that intrinsic motivation exerts significant incentive effect to the agent's behavior; it can improve the agent's effort. Especially, when the individual's intrinsic motivation boosts, the optimal level of extrinsic incentive will fall, but the agent's effort will improve. So intrinsic motivation should be the core of incentive mechanism, and extrinsic incentive is the complement to it. As for the effect of intrinsic motivation to delegation, we found out that intrinsic motivation can not only affect the individual's preference, but also motivate his behavior in the function of his authority. Authority can boost the agent's intrinsic motivation, and which can be used by delegation. When intrinsic motivation is neglected, the delegation will be insufficient. Furthermore, delegation should be decided according to the reward contingent on performance, the agent's potential gains and loss from the project, the interdependence between the principal and the agent.Individual's behavior is affected by his fortune. In order to motivate the individualto fulfill his duty devotedly, the principal should help the agent to accumulate his fortune on one hand, and to control the agent's potential gains and loss from the fulfillment of his duty on the other hand. Delegation should be decided according to the yields of the project, the agent's potential gains and loss from the project, the level of his fortune and wage, together with the goal he is pursuing. And the goal set for the agent by the principal should not be too high; it'd better be lower for some difference than the agent's own goal on the contrary. When the company is stagnant, it cannot count on to overcome the difficulty by cutting wages, instead, it should increase some employee's wages while firing some others in order to keep the core business operating on the rails. As a supplement to the theoretic parts, this paper also expatiates how to evaluate the agent's intrinsic motivate according to the different sources of intrinsic motivation. So we can effectively use it to improve the effect of incentive mechanism. In managerial practice, managers usually make use of agent's intrinsic motivation unconsciously, widely included in deferring payment, allocation of authority and tasks, and the principles of employment etc. This paper discussed the internal mechanism of intrinsic motivation in these phenomena and provided some directions on using the agent's intrinsic motivation more effectively. Although delegation can...
Keywords/Search Tags:intrinsic motivation, extrinsic motivation, human resource management, incentives, principal-agent
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