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Delegation, Committees, and Managers

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  • Birger Wernerfelt

Abstract

Attempts to economize on decision‐making time imply that groups of peers may delegate authority to a small committee of managers even though this means that the information and preferences of the uninvolved players are neglected. Decisions are more likely to be delegated to players with better information and more representative preferences. The possibility of ex post protests may force managers to take the preferences of others into account but may also give them incentives to ignore their private information. The argument may explain employees' willingness to let bosses decide, and thus throw some light on the theory of the firm.

Suggested Citation

  • Birger Wernerfelt, 2007. "Delegation, Committees, and Managers," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(1), pages 35-51, March.
    • Handle: RePEc:bla:jemstr:v:16:y:2007:i:1:p:35-51
    DOI: 10.1111/j.1530-9134.2007.00131.x
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    References listed on IDEAS

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    Cited by:

    1. Otto H. Swank & Bauke Visser, 2007. "Is Transparency to no avail? Committee Decision-making, Pre-meetings, and Credible Deals," Tinbergen Institute Discussion Papers 07-055/1, Tinbergen Institute.
    2. Morvarid Rahmani & Guillaume Roels & Uday S. Karmarkar, 2018. "Team Leadership and Performance: Combining the Roles of Direction and Contribution," Management Science, INFORMS, vol. 64(11), pages 5234-5249, November.
    3. Birger Wernerfelt, 2013. "Small forces and large firms: Foundations of the RBV," Strategic Management Journal, Wiley Blackwell, vol. 34(6), pages 635-643, June.
    4. Magdalena Dobrajska & Stephan Billinger & Samina Karim, 2015. "Delegation Within Hierarchies: How Information Processing and Knowledge Characteristics Influence the Allocation of Formal and Real Decision Authority," Organization Science, INFORMS, vol. 26(3), pages 687-704, June.

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