Abstract

http://ssrn.com/abstract=1364320
 
 

References (138)



 
 

Citations (3)



 


 



Authority Versus Loyalty: Social Incentives and Governance


Samuel Lee


New York University (NYU) - Leonard N. Stern School of Business; European Corporate Governance Institute (ECGI)

Petra Persson


Stanford University; Research Institute of Industrial Economics (IFN)

August 30, 2011

NYU Working Paper No. FIN-10-001

Abstract:     
The role of social ties in governance is controversial. We theorize that this ambivalence is natural: Social ties transmit incentives between individuals, so how they affect governance hinges on the specific incentives transmitted. We show this in a principal-supervisor-agent model where the supervisor is friends with the agent and cherishes social recognition. Two modes of governance emerge that differ in whether the principal opposes or endorses the subordinates' friendship: one based on conflict and authority, the other on trust and loyalty. For empirics, this theory implies that, to sensibly evaluate their impact, social ties must be interacted with individual incentives.

Number of Pages in PDF File: 39

Keywords: Governance, Social Ties, Cronyism, Social Capital, Social Incentives, Delegated Monitoring, Family Firms, Organizational Culture

JEL Classification: D82, D64, G30, Z13

working papers series


Download This Paper

Date posted: March 22, 2009 ; Last revised: July 20, 2012

Suggested Citation

Lee, Samuel and Persson, Petra, Authority Versus Loyalty: Social Incentives and Governance (August 30, 2011). NYU Working Paper No. FIN-10-001. Available at SSRN: http://ssrn.com/abstract=1364320 or http://dx.doi.org/10.2139/ssrn.1364320

Contact Information

Samuel Lee (Contact Author)
New York University (NYU) - Leonard N. Stern School of Business ( email )
44 West 4th Street
New York, NY NY 10012
United States
European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Petra Persson
Stanford University ( email )
Stanford, CA 94305
United States
Research Institute of Industrial Economics (IFN) ( email )
Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
Feedback to SSRN


Paper statistics
Abstract Views: 2,068
Downloads: 480
Download Rank: 27,209
References:  138
Citations:  3

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.422 seconds