Archive for 28 April 2007
The Dark Side of Capital Pooling
| Peter Klein |
The great advantage of joint-stock companies, whether public or private, is the ability to create value by pooling capital. Unfortunately, capital pools can also be channeled to activities that destroy value. (HT: Against Monopoly.)
Teaching Management through Demotivators
| Peter Klein |
Like many of you, I’ve considered using teaching my managerial economics course using a Dilbert collection as a secondary, or even primary, text. There are so many good ones! One could also use the wickedly funny Demotivators to illustrate key managerial and organizational theories and concepts. For example:
- Gains from trade: Consulting
- Agency costs: Get to Work, Indifference, Mediocrity
- Human capital: Incompetence, Potential
- Time preference, discounting: Procrastination
- Risk aversion: Risks
- Relative performance evaluation, internal labor markets, tournaments: Blame, Delusions, Elitism, Success
- Organizational innovation, strategic change management: Change
- Free riding, teams: Irresponsibility
- Hierarchy: Power
- Role of the institutional environment: Effort, Underachievement
Organizations and Markets 
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