Prof. J.P. Eggers (New York University)

Program

• Date: 11.04.2013
  Time: 5pm - 7pm
  Location: Schackstr. 4, Room 307

Competition, Cooperation, and Search: Incentives and the Competition for Research Resources in Multidivisional Firms

This study explores the implications of intra-organizational competition between divisions for corporate resources. We incorporate the idea that division managers may view other divisions as relevant for the setting of aspiration levels, and that such a focus on inter-divisional competition - in addition to more traditional historical and organizational aspirations that mirror typical incentives provided to managers - may have implications for organizational adaptation. We explore the resulting effects on organizational performance and behavior, using a computational model that includes different environmental conditions and different combinations of incentive regimes. The results indicate that intra‐organizational competition may be beneficial in more stable environments, whereas it can hurt performance in more dynamic environments when compared with historical and organizational incentives. The results also show that, at least in some cases, the combination of two or more incentive regimes produce behavioral and performance results that are very different from a weighted average of the component pure incentive outcomes. The model has implications for work on intra-organizational competition, the role of incentives in driving managerial behavior, and the link between organizational design, external environment, and performance.