Wouter Dessein, Andrea Prat, 25 February 2019

A growing body of empirical work documents how management is a key production factor, both in terms of management practices and managerial talent. This column distinguishes three disparate theories, proposing a new framework that reconciles the insight of each. Contingency theory holds that firms always make optimal decisions, while the organisation-centric and leader-centric approaches hold that firms adopt better management practices, or hire better CEOS, respectively, for unmodeled reasons. The new framework integrates leadership quality and organisational capital, and generates new testable hypotheses.

James Andreoni, Laura Gee, 14 June 2011

How should a small organisation – a firm, a university, a sports team – encourage good behaviour? While punishment can often make things worse, this column proposes and tests a method the authors call the “hired gun”. By punishing only the worst offender, everyone is given an incentive to be the second-worst offender. If everyone follows that strategy, good behaviour soon follows.

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