Skip Navigation


Cambridge Journal of Economics Advance Access originally published online on February 8, 2006
Cambridge Journal of Economics 2006 30(5):797-818; doi:10.1093/cje/bei107
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
30/5/797    most recent
bei107v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrow Search for citing articles in:
ISI Web of Science (2)
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Foss, K.
Right arrow Articles by Vázquez, X. H.
Right arrow Search for Related Content
Related Collections
Right arrow L25 - Firm Performance: Size, Diversification, and Scope
Right arrow L63 - Microelectronics; Computers; Communications Equipment
Right arrow L66 - Food; Beverages; Cosmetics; Tobacco; Wine and Spirits
Right arrow M12 - Personnel Management
Right arrow M21 - Business Economics
Right arrow M50 - General
Right arrow M54 - Labor Management
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author 2006. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.

Article

‘Tying the manager's hands’: constraining opportunistic managerial intervention

Kirsten Foss, Nicolai J. Foss and Xosé H. Vázquez*

* Copenhagen Business School (Kirsten Foss and Nicolai J Foss) and Universidade de Vigo (Xosé H. Vázquez)

Address for correspondence: Center of Strategic Management and Globalisation, Copenhagen Business School, Porcelænshaven 24; 2000 Frederiksberg, Denmark; email: kf.smg{at}cbs.dk

Abstract

We discuss and examine empirically a firm-level equivalent of the ancient problem of ‘tying the King's hands’, namely how to avoid managerial intervention that is undertaken to reap private benefits but is harmful to overall value creation, that is, ‘managerial opportunism’. The link from managerial intervention to firm-level value-creation is moderated by employee motivation. Thus, intervention in the form of managers overruling employees or reneging on delegation may demotivate employees, particularly when the intervention is perceived as being unfair, undertaken for personal gain, etc. We argue that a number of mechanisms, such as managers staking their personal reputation, employees controlling important assets, strong trade unions, etc. may function as constraints on managerial proclivities to intervene, thus reducing the problem of managerial opportunism. We derive four hypotheses from these ideas, and test them, using path-analysis, on a rich dataset, based on 329 firms in the Spanish food and electric/electronic industries.

Key Words: Delegation of discretion • Employee motivation • Firm performance • Managerial intervention

JEL classifications: M12, M21, M54

Manuscript received October 6, 2003; final version received July 18, 2005.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 Cambridge J EconHome page
U. Jirjahn
Works councils and employment growth in German establishments
Camb. J. Econ., April 21, 2009; (2009) bep012v1.
[Abstract] [Full Text] [PDF]


Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.