Because of the inherent uncertainty, promotion of innovation critically depends on screening mechanisms to select projects. This paper studies the relationship between bureaucracy and financial constraints as two such mechanisms. The lack of commitment to hard financial constraints interferes...

We model an organization as a hierarchy of managers erected on top of a technology (here consisting of a collection of plants). In our framework, the role of a manager is to take steps to reduce the adverse consequences of shocks that affect the plants beneath him. We argue that different...

This paper studies incentives and loss of control in a hierarchy model that combines and generalizes the models of Williamson, Calvo-Wellisz and Keren-Levhari. The levels of effort from managers and workers, the wage scales, the span of control, and the total number of tiers are all endogenous....