The Importance of Legitimacy
Within organizations, there are typically limits to leaders’ legitimacy. This article explores how organizations are structured in the face of such constraints. The concept of legitimacy is formalized in the context of a single-agent moral hazard m...
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| Format: | Journal Article |
| Language: | English |
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Published by Oxford University Press on behalf of the World Bank
2019
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| Online Access: | http://documents.worldbank.org/curated/en/704991565614319221/The-Importance-of-Legitimacy http://hdl.handle.net/10986/32241 |
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okr-10986-322412021-05-25T10:54:42Z The Importance of Legitimacy Akerlof, Robert LEADERSHIP LEGITIMACY MORAL HAZARD MODEL BUREAUCRACY MERGERS HIRING BIAS HIGH WAGES ORGANIZATIONAL MANAGEMENT Within organizations, there are typically limits to leaders’ legitimacy. This article explores how organizations are structured in the face of such constraints. The concept of legitimacy is formalized in the context of a single-agent moral hazard model. The principal can give the agent monetary incentives; in addition, he can give the agent an order. The agent finds it costly to disobey orders provided they are legitimate. The authors find that it may be optimal for the principal to take costly actions to bolster legitimacy. The authors argue that many organizational phenomena can be understood as attempts to bolster legitimacy. Examples include: rejection of overqualified workers, bureaucracy, merger decisions, and above-market-clearing wages. 2019-08-13T19:23:29Z 2019-08-13T19:23:29Z 2016-04-12 Journal Article http://documents.worldbank.org/curated/en/704991565614319221/The-Importance-of-Legitimacy World Bank Economic Review http://hdl.handle.net/10986/32241 English CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article Publications & Research |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
LEADERSHIP LEGITIMACY MORAL HAZARD MODEL BUREAUCRACY MERGERS HIRING BIAS HIGH WAGES ORGANIZATIONAL MANAGEMENT |
| spellingShingle |
LEADERSHIP LEGITIMACY MORAL HAZARD MODEL BUREAUCRACY MERGERS HIRING BIAS HIGH WAGES ORGANIZATIONAL MANAGEMENT Akerlof, Robert The Importance of Legitimacy |
| description |
Within organizations, there are
typically limits to leaders’ legitimacy. This article
explores how organizations are structured in the face of
such constraints. The concept of legitimacy is formalized in
the context of a single-agent moral hazard model. The
principal can give the agent monetary incentives; in
addition, he can give the agent an order. The agent finds it
costly to disobey orders provided they are legitimate. The
authors find that it may be optimal for the principal to
take costly actions to bolster legitimacy. The authors argue
that many organizational phenomena can be understood as
attempts to bolster legitimacy. Examples include: rejection
of overqualified workers, bureaucracy, merger decisions, and
above-market-clearing wages. |
| format |
Journal Article |
| author |
Akerlof, Robert |
| author_facet |
Akerlof, Robert |
| author_sort |
Akerlof, Robert |
| title |
The Importance of Legitimacy |
| title_short |
The Importance of Legitimacy |
| title_full |
The Importance of Legitimacy |
| title_fullStr |
The Importance of Legitimacy |
| title_full_unstemmed |
The Importance of Legitimacy |
| title_sort |
importance of legitimacy |
| publisher |
Published by Oxford University Press on behalf of the World Bank |
| publishDate |
2019 |
| url |
http://documents.worldbank.org/curated/en/704991565614319221/The-Importance-of-Legitimacy http://hdl.handle.net/10986/32241 |
| _version_ |
1764476109704921088 |