IDEAS home Printed from https://ideas.repec.org/p/ajk/ajkdps/084.html
   My bibliography  Save this paper

Endogenous Organizational Restructuring: Status, Productivity, & Meritocratic Dynamics

Author

Listed:
  • Ashutosh Thakur

    (Stanford Graduate School of Business and University of Cologne)

  • Jonathan Bendor

    (Stanford Graduate School of Business)

Abstract

We model the dynamics of endogenous organizational restructuring, where those being assigned positions in an organization can themselves lobby for who gets which position. Internal labor market changes depend on how much individuals value their own status in the organization, the organizational output, their friends' welfare, and the quality of their own departmental colleagues. Meritocratic assignments are reached with probability one when agents value organizational output even with epsilon weight, provided friend networks and departments are not too large. We also characterize the effects of various voting rules, agendas, and specializations on the paths and the stability of organizational structures.

Suggested Citation

  • Ashutosh Thakur & Jonathan Bendor, 2021. "Endogenous Organizational Restructuring: Status, Productivity, & Meritocratic Dynamics," ECONtribute Discussion Papers Series 084, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:084
    as

    Download full text from publisher

    File URL: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_084_2021.pdf
    File Function: First version, 2021
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lisa Meulbroek, 2001. "The Efficiency of Equity-Linked Compensation: Understanding the Full Cost of Awarding Executive Stock Options," Financial Management, Financial Management Association, vol. 30(2), Summer.
    2. David A. Matsa & Amalia R. Miller, 2011. "Chipping Away at the Glass Ceiling: Gender Spillovers in Corporate Leadership," American Economic Review, American Economic Association, vol. 101(3), pages 635-639, May.
    3. Patrick Francois & Francesco Trebbi & Kairong Xiao, 2023. "Factions in Nondemocracies: Theory and Evidence From the Chinese Communist Party," Econometrica, Econometric Society, vol. 91(2), pages 565-603, March.
    4. Villalonga, Belen & Amit, Raphael, 2006. "How do family ownership, control and management affect firm value?," Journal of Financial Economics, Elsevier, vol. 80(2), pages 385-417, May.
    5. Lemos, Renata & Scur, Daniela, 2018. "All in the family? CEO choice and firm organization," LSE Research Online Documents on Economics 88679, London School of Economics and Political Science, LSE Library.
    6. Lakshmi Iyer & Anandi Mani, 2012. "Traveling Agents: Political Change and Bureaucratic Turnover in India," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 723-739, August.
    7. Himmelberg, Charles P. & Hubbard, R. Glenn & Palia, Darius, 1999. "Understanding the determinants of managerial ownership and the link between ownership and performance," Journal of Financial Economics, Elsevier, vol. 53(3), pages 353-384, September.
    8. Core, John & Guay, Wayne, 1999. "The use of equity grants to manage optimal equity incentive levels," Journal of Accounting and Economics, Elsevier, vol. 28(2), pages 151-184, December.
    9. Oriana Bandiera & Luigi Guiso & Andrea Prat & Raffaella Sadun, 2011. "What Do CEOs Do?," EIEF Working Papers Series 1101, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2010.
    10. Hongbin Cai & Hongbin Li & Albert Park & Li-An Zhou, 2013. "Family Ties and Organizational Design: Evidence from Chinese Private Firms," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 850-867, July.
    11. Tayfun Sönmez & Tobias B. Switzer, 2013. "Matching With (Branch‐of‐Choice) Contracts at the United States Military Academy," Econometrica, Econometric Society, vol. 81(2), pages 451-488, March.
    12. Marianne Bertrand & Antoinette Schoar, 2003. "Managing with Style: The Effect of Managers on Firm Policies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1169-1208.
    13. Bertrand, Marianne & Johnson, Simon & Samphantharak, Krislert & Schoar, Antoinette, 2008. "Mixing family with business: A study of Thai business groups and the families behind them," Journal of Financial Economics, Elsevier, vol. 88(3), pages 466-498, June.
    14. David A. Matsa & Amalia R. Miller, 2011. "Chipping Away at the Glass Ceiling: Gender Spillovers in Corporate Leadership," American Economic Review, American Economic Association, pages 635-639.
    15. Rajgopal, Shivaram & Shevlin, Terry, 2002. "Empirical evidence on the relation between stock option compensation and risk taking," Journal of Accounting and Economics, Elsevier, vol. 33(2), pages 145-171, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Neyland, Jordan, 2020. "Love or money: The effect of CEO divorce on firm risk and compensation," Journal of Corporate Finance, Elsevier, vol. 60(C).
    2. Scur, Daniela & Lemos, Renata, 2019. "The ties that bind: implicit contracts and management practices in family-run firms," CEPR Discussion Papers 13794, C.E.P.R. Discussion Papers.
    3. Mario Daniele Amore & Orsola Garofalo & Alessandro Minichilli, 2014. "Gender Interactions Within the Family Firm," Management Science, INFORMS, vol. 60(5), pages 1083-1097, May.
    4. Oriana Bandiera & Renata Lemos & Andrea Prat & Raffaella Sadun, 2018. "Managing the Family Firm: Evidence from CEOs at Work," The Review of Financial Studies, Society for Financial Studies, vol. 31(5), pages 1605-1653.
    5. repec:mth:ijafr8:v:8:y:2018:i:2:p:1-25 is not listed on IDEAS
    6. Sitthipongpanich, Thitima & Polsiri, Piruna, 2015. "Do CEO and board characteristics matter? A study of Thai family firms," Journal of Family Business Strategy, Elsevier, vol. 6(2), pages 119-129.
    7. J. Samuel Baixauli-Soler & Maria Belda-Ruiz & Gregorio Sanchez-Marin, 2017. "An executive hierarchy analysis of stock options: Does gender matter?," Review of Managerial Science, Springer, vol. 11(4), pages 737-766, October.
    8. Lemos, Renata & Scur, Daniela, 2018. "All in the family? CEO choice and firm organization," LSE Research Online Documents on Economics 88679, London School of Economics and Political Science, LSE Library.
    9. Kubo, Katsuyuki & Nguyen, Thanh Thi Phuong, 2021. "Female CEOs on Japanese corporate boards and firm performance," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).
    10. Darius Palia & S. Ravid & Chia-Jane Wang, 2008. "Founders versus non-founders in large companies: financial incentives and the call for regulation," Journal of Regulatory Economics, Springer, vol. 33(1), pages 55-86, February.
    11. Chakraborty, Atreya & Gao, Lucia Silva & Sheikh, Shahbaz, 2019. "Managerial risk taking incentives, corporate social responsibility and firm risk," Journal of Economics and Business, Elsevier, vol. 101(C), pages 58-72.
    12. David A. Matsa & Amalia R. Miller, 2014. "Workforce Reductions at Women-Owned Businesses in the United States," ILR Review, Cornell University, ILR School, vol. 67(2), pages 422-452, April.
    13. Amore, Mario Daniele & Miller, Danny & Le Breton-Miller, Isabelle & Corbetta, Guido, 2017. "For love and money: Marital leadership in family firms," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 461-476.
    14. Henrik Cronqvist & Rüdiger Fahlenbrach, 2009. "Large Shareholders and Corporate Policies," The Review of Financial Studies, Society for Financial Studies, vol. 22(10), pages 3941-3976, October.
    15. Muurling, Rutger & Lehnert, Thorsten, 2004. "Option-based compensation: a survey," The International Journal of Accounting, Elsevier, vol. 39(4), pages 365-401.
    16. Li, Qing & Hu, Dezhuang & Li, Tang, 2022. "The innovation of family firms in China: New evidence from the China employer-employee survey," China Economic Review, Elsevier, vol. 72(C).
    17. Chen, Cheng & Steinwender, Claudia, 2021. "Import competition, heterogeneous preferences of managers, and productivity," Journal of International Economics, Elsevier, vol. 133(C).
    18. Helene Maghin, 2022. "Cracks in the Boards: The Opportunity Cost of Governance Homogeneity," CESifo Working Paper Series 9816, CESifo.
    19. Ferreira, Daniel & Athanasakou, Vasiliki & Goh, Lisa, 2017. "Changes in CEO Stock Option Grants: A Look at the Numbers," CEPR Discussion Papers 12318, C.E.P.R. Discussion Papers.
    20. Ren, Siewan & Wright, Anna & Wyatt, Anne, 2012. "Stock option use by Australian IPOs," Journal of Contemporary Accounting and Economics, Elsevier, vol. 8(1), pages 1-22.
    21. Yeh, Yin-Hua & Liao, Chen-Chieh, 2021. "Are non-family successors all the same? Inside-promoted vs. outside-sourced," Journal of Corporate Finance, Elsevier, vol. 71(C).

    More about this item

    Keywords

    organizational reform; assignment; voting; institutions; meritocracy; status;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ajk:ajkdps:084. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ECONtribute Office (email available below). General contact details of provider: https://www.econtribute.de .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.