Performance Management of Investment Center Managers
Falconer Mitchell and Hanne Nørreklit
Insights from This Case Study
The governance of decentralized corporations involves the HQ-management transfer of their decision-making authority to investment center managers. Conventional thinking of principal–agent theory looks at the investment center managers as opportunistic agents who should be motivated and monitored through performance contracts. However, performance measures are reductive and can have serious dysfunctional consequences. This chapter argues that managers in practice can deal with some of the problems of the imperfections of accounting measurement through the application of an interactive communicative method of coauthoring ...
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