Agency conflicts between board and manager

Detecting agency problems is an important task when assessing the effectiveness of a nonprofit organization's governance. A first step is to examine the objectives of principals and agents and determine whether there is a systematic difference between them. Using a discrete choice experiment, we identify the objectives of board chairpersons (principals) and headmasters (agents) of Flemish nonprofit schools. We find systematic differences between the two groups. Of the seven possible objectives set out in the experiment, six are relevant for both headmasters and board chairpersons. For four of these, the preferences of both groups differ significantly. Whereas ideological values play an important role for both the board and the headmaster, they are significantly more important for the board. Both parties dislike having a large number of pupils, and the disutility is larger for the board. With respect to job satisfaction and pupil satisfaction, we find the opposite: while the board is prepared to give up pupil and job satisfaction in favor of the other objectives, these two objectives score very high on the priority list of the headmasters.     

Effect of Berkson measurement error on parameter estimates in Cox regression models

We study the effect of additive and multiplicative Berkson measurement error in Cox proportional hazard model. By plotting the true and the observed survivor function and the true and the observed hazard function dependent on the exposure one can get ideas about the effect of this type of error on the estimation of the slope parameter corresponding to the variable measured with error. As an example, we analyze the measurement error in the situation of the German Uranium Miners Cohort Study both with graphical methods and with a simulation study. We do not see a substantial bias in the presence of small measurement error and in the rare disease case. Even the effect of a Berkson measurement error with high variance, which is not unrealistic in our example, is a negligible attenuation of the observed effect. However, this effect is more pronounced for multiplicative measurement error.     

Principal‐agent relationships on the stewardship‐agency axis

This article provides an overview of the literature on nonprofit principal‐agent relationships. It depicts the nature of agency theory and stewardship theory, analyzes the origin of their struggle within the nonprofit structure, and marks directions for a conciliatory approach. We open with an introduction to agency theory and discuss the two main components of its mathematical branch. We thereby contrast it with stewardship theory and elaborate on the arguments that can affect the position of nonprofit principal‐agent relationships on the stewardship‐agency axis. Analysis of the existing literature points to a lack of consensus as to which theory should be applied. We argue that the division of nonprofit principalagent relationships into board‐manager and manageremployee interactions may help to clarify the balance between agency theory and stewardship theory and may lead to the establishment of a strongly founded theory on nonprofit principal‐agent relationships. We close with a discussion of how this article may prove valuable to nonprofit policymakers and other empirical researchers.     

Managing demographic change and diversity in organizations: how feedback from coworkers moderates the relationship between age and innovative work behavior

In a field study of 211 employees of a midsized German high-tech company, useful feedback from coworkers was examined as a moderator of the relationship between age and supervisor ratings of radical innovative work behavior. When employees perceived higher levels of useful feedback from their coworkers, the relationship between age and radical innovative work behavior followed an inverted U-shape. This inverted U-shaped relationship was decreasingly manifested as the level of perceived useful feedback from coworkers dropped. Given demographic change and the aging of the workforce of many organizations, this finding broadens the still fragmentary knowledge of the conditions under which aging is likely to have more or less positive effects on innovative work behavior. The authors discuss the theoretical and practical implications of these results on both the individual and the team level of analysis.     

‘Irrationality’ of managerial judgments: Implications for information systems

Four principal factors affecting rational information processing behavior in organizations are discussed. These are: (1) the nature and attributes of the messages received from the Management Information and Decision System (MIDS); (2) The personal qualities and attitudes of the manager himself; (3) the degree of social interaction; and (4) if a collective is involved, the format and group decision function used in arriving at a group position. Ways in which information specialists and operations researchers can counter, ameliorate, and exploit managers' judgmental biases and inconsistencies are then proposed. Areas for further research are suggested.