Foreign subsidiary compensation strategy: an agency theory perspective

Article Abstract:

This study extends agency theory to explain the design of compensation strategy in foreign subsidiaries competing within global industries. Results from 100 subsidiaries in five countries indicate that compensation strategy is influenced by the agency problem, defined by the subsidiary's cultural distance from its headquarters market, lateral centralization, and senior management's commitment to the parent. In addition, the association between the overall design of the compensation strategy and perceived subsidiary effectiveness was examined. An incentive structure aligned to the agency state was positively related to subsidiary effectiveness. (Reprinted by permission of the publisher.)

International aspects, Compensation and benefits, Foreign corporations, Subsidiary corporations, Subsidiaries, International business enterprises, Multinational corporations, Compensation management

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Impact of "adverse selection" on managers' project evaluation decisions

Article Abstract:

Agency theory can be used to explain decisions to continue a failing project. The results of a decision-making experiment provide empirical support for the proposition that when the conditions for adverse selection exist - and agent has private information and an incentive to shirk - such decisions, apparently irrational from a principal's perspective, may be rational from the agent's perspective. (Reprinted by permission of the publisher.)

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Being emotional during decision making-good or bad? An empirical investigation

Article Abstract:

The relation between affective experience and decision-making performance is studied.

United States, Science & research, Influence, Emotions

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