The hidden perils of career concerns in R&D organizations

Enno Siemsen

Research output: Contribution to journalArticlepeer-review

20 Scopus citations

Abstract

This research examines how certain economic incentives can lead agents to prefer difficult solutions to their organizational tasks that reduce their likelihood of obtaining a successful task outcome. Drawing on the career concerns literature, I model a decision context in which agents have the operational autonomy to choose among different solutions. Analyzing this model reveals that agents with career concerns will, under certain conditions, deliberately reduce their likelihood of succeeding with a task by choosing a solution that makes their task more difficult. These findings suggest that highly capable agents prefer moderately difficult tasks to showcase their capability, while less-capable agents prefer highly difficult tasks to mask their lack of capability. The robustness of these results is examined in various extensions. Furthermore, the paper provides insights on how incentives can be designed to alleviate this problem.

Original languageEnglish (US)
Pages (from-to)863-877
Number of pages15
JournalManagement Science
Volume54
Issue number5
DOIs
StatePublished - May 1 2008

Keywords

  • Autonomy
  • Career concerns
  • Incentives
  • New product development
  • Task difficulty

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