|
Archive@NYU >
Stern School of Business >
Finance Working Papers >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/29609
|
| Title: | Authority versus Loyalty: Social Incentives and Modes of Governance |
| Authors: | Lee, Samuel
Persson, Petra |
| Issue Date: | 8-Apr-2010 |
| Series/Report no.: | FIN-10-001 |
| Abstract: | This paper examines the effects of social ties on governance. Social
ties are per se neutral and merely act as incentive bridges that
transmit incentives between individuals. Whether such transmission of
incentives improves or undermines governance depends on the particular
incentives transmitted. We demonstrate this through a delegated
monitoring model where the supervisor is friends with the agent and
cares about social recognition. Two basic modes of governance emerge,
authority and loyalty, which differ in whether they encourage or
discourage social ties. This dichotomy reconciles opposing views on the
effect of social ties on governance, and provides new perspectives on
family firms, gray directors, business networks, and organizational culture. |
| URI: | http://hdl.handle.net/2451/29609 |
| Appears in Collections: | Finance Working Papers
|
All items in Faculty Digital Archive are protected by copyright, with all rights reserved.
|
