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Designing Governance Mechanisms for Knowledge-Intensive Activities (2008)
| Citations: | 2 - 0 self |
BibTeX
@MISC{Gambardella08designinggovernance,
author = {Alfonso Gambardella and Claudio Panico},
title = {Designing Governance Mechanisms for Knowledge-Intensive Activities},
year = {2008}
}
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Abstract
Knowledge-intensive activities are bound by imperfections that limit the provision of in-centives, particularly asymmetric information about inputs and unclear denition of outputs. Thus, performance-based incentives are not possible. We then model a contract in which the rm can use the delegation of decision rights to provide incentives. The main argument is that a ne-tuned allocation of decision rights reduces the information rents of a knowledge provider by osetting her strategic use of the information advantage. We show that when the rm owns strong complementary assets to leverage the provider's knowledge, the delegation of decision rights can fully resolve the limitations due to asymmetric information. When this condition is not met, the provider is oered full autonomy, but it is optimal for the rm to let the most knowledgeable providers go. We also discuss the generality of our approach.
Keyphrases
knowledge-intensive activity decision right governance mechanism asymmetric information unclear denition knowledge provider ne-tuned allocation performance-based incentive full autonomy strategic use information advantage knowledgeable provider main argument strong complementary asset information rent
