The use of knowledge in firms

Article Abstract:

An important theme in Austrian economics is the idea of dispersed knowledge, and this can be applied to theories about how firms are organized. Hayek's view of economics are relevant here, in the theories of firm organization suppress dispersed knowledge. It is not easy to model dispersed knowledge using the narrow methods of firm organization theorists, which focus on incentives and conflicts. A move toward interest in unforeseen contingencies, organizational codes, and communication could allow insights from Austrian economics to be used by modern firm theorists.

Analysis, Corporations, Organizational research, Knowledge, Theory of, Epistemology

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Performance monitoring and financial disclosure choice

Article Abstract:

The links between the monitoring of how well a manager performs, by an entrepreneur, and the financial disclosure policy selected by that entrepreneur for his firm have been examined. This has been analyzed in a context of informed traders and incomplete contracting. Financial disclosure and the market price of the company's stocks are used as a way of assessing the manager in terms of non-contractible effort. Entrepreneurs may not generally decide on the method of financial disclosure that provides most information for stockholders.

Disclosure (Securities law), Employee performance appraisals, Financial statements, Performance appraisals

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Performance measurement in multi-period agencies

Article Abstract:

The evaluation of managerial performance in an environment characterized by a dynamic agency shows that agents can create value and involve the company in transactions that are value neutral. Viable incentive schemes should not permit the agent's payoff to be influenced by this type of financing transaction. The underlying problem of agency has to be stationary if incentive schemes using realized cash flow are to be effective. Accrual accounting measures can play a valuable role in evaluating the performance of managers.

Compensation and benefits, Executives, Executive compensation, Cash flow, Incentives (Business)

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