Decision Initiation, Decision Implementation, and the Allocation of Decision Rights

39 Pages Posted: 8 Oct 2015

See all articles by Randolph Sloof

Randolph Sloof

University of Amsterdam - Faculty of Economics & Business (FEB); Tinbergen Institute

Ferdinand von Siemens

Goethe University Frankfurt; CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: September 22, 2015

Abstract

Organizations must not only take the right decisions, they must also ensure that these decisions are effectively implemented. Fama & Jensen (1983) argue that the same members of many organization are often responsible for both decision initiation and implementation. If these have social preferences, they might thus sabotage both project choices and implementation to express their discontent with the allocation of decision rights. How decisions come about also affects implementation if workers have reciprocal fairness concerns. Our experimental evidence demonstrates that the possibility to sabotage implementation leads to more delegation, but only if workers have high costs of obstructing informed decisions. We further find that the allocation of authority as such affects implementation.

Keywords: delegation, implementation, procedural preferences, reciprocity

JEL Classification: C910, D230, D860, L200

Suggested Citation

Sloof, Randolph and von Siemens, Ferdinand, Decision Initiation, Decision Implementation, and the Allocation of Decision Rights (September 22, 2015). CESifo Working Paper Series No. 5509, Available at SSRN: https://ssrn.com/abstract=2670580 or http://dx.doi.org/10.2139/ssrn.2670580

Randolph Sloof

University of Amsterdam - Faculty of Economics & Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 20 525 5241 (Phone)
+31 20 525 4310 (Fax)

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Ferdinand Von Siemens (Contact Author)

Goethe University Frankfurt ( email )

Faculty of Economics and Business Administration
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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