Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-52060
Osterloh, Margit; Frey, Bruno S (2003). Corporate Governance for Crooks? The Case for Corporate Virtue. Working paper series / Institute for Empirical Research in Economics No. 164, University of Zurich.
Corporate scandals are reflected in excessive top management compensation and fraudulent accounts. These scandals cause an enormous amount of damage, not only to the companies affected, but also to the market economy as a whole. As a solution, conventional wisdom suggests more monitoring and sanctioning of management. We argue that these efforts will create a governance structure for crooks. Instead of solving the problem, they make it worse. Selfish extrinsic motivation is reinforced. We suggest measures which clash with conventional wisdom: selecting employees with pro-social intrinsic preferences, de-emphasizing variable pay for performance and strengthening the participation and self-governance of employees. These measures help to increase intrinsically motivated corporate virtue and honesty.
393 downloads since deposited on 29 Nov 2011
111 downloads since 12 months
|Item Type:||Working Paper|
|Communities & Collections:||03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
|Dewey Decimal Classification:||330 Economics|
|Deposited On:||29 Nov 2011 22:32|
|Last Modified:||05 Apr 2016 15:10|
|Series Name:||Working paper series / Institute for Empirical Research in Economics|
Users (please log in): suggest update or correction for this item
Repository Staff Only: item control page