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Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-44412

Inauen, Emil; Rost, Katja; Osterloh, Margit; Frey, Bruno S (2010). Back to the future - a monastic perspective on corporate governance. Management Revue, 21(1):38-59.

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Abstract

The financial crisis is a crisis of governance as well. In search of answers and solutions many scholars and practitioners recommend improved output control, i.e. better external incentives or even stricter regulations. Monasteries demonstrate that alternative models may be more suitable to enhance sustainable governance quality and to reduce agency problems. In the long history of monasteries, some abbots and monks were known to line their own pockets and some monasteries were undisciplined. Monasteries developed special systems to combat these excesses thus ensuring their survival over centuries. We study these features from an economic perspective. Derived from an analysis of the Benedictine monastery of Engelberg we offer three improvements of applied governance designed to reduce agency problems. First, monastic governance emphasizes clan control rather than output control. Monasteries demonstrate that organizations can prevent agency problems by complementing external discipline with internal behavioral incentives, such as value systems and voice. Second, organization members making firm-specific investments are motivated by broad participation rights and co determination. Third, the Benedictines are able to apply supportive external control mechanisms not perceived as controlling.

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
03 Faculty of Economics > Department of Business Administration
DDC:330 Economics
Language:English
Date:2010
Deposited On:03 Feb 2011 10:51
Last Modified:06 Dec 2012 02:45
Publisher:Rainer Hampp Verlag
ISSN:0935-9915
Related URLs:http://www.hampp-verlag.de/hampp_e-journals_mrev.htm (Publisher)
Citations:Google Scholarā„¢

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