Missing The Blend

In Accounting Theory, so much research relating to efficiency of contracts and how to develop contract that best motivates manager to act in the best interest of business owners. Such a major research focus on the part of so many for the better part of 30 years. What sort of bonus plan. All motivation being money, money. Less money means less motivation. Leading to much research that managers are underpaid, relative to the overall benefits created for the corporation, assumed to be able to be isolated and referenced to managerial effort.

Little empirical evidence that this research as to ideal contractual arrangements resulted in wide adoption. Lots of empirical evidence as to managers maximizing their own interests and then exiting. Lots of public and regulatory views that many managers grossly overpaid and regularly acting contrary to shareholder interests.

Missing from the blend: the contemporaneous research from Psychology, Sociology and Organizational Behaviour. Much involving direct human contact and personal subject examination. No nice mathematical model to then apply to thousands of market-referenced data points, with little, if any, actual examination of the people involved. Can’t remember seeing many, if any, research papers involving supposed experts in contract theory and supposed experts in other, related disciplines.

If no one is applying research that is intended to establish ideal conditions…

I think we all have an obligation to dampen these fires of envy.

About brucelarochelle

http://www.lmslawyers.com/bruce-la-rochelle
This entry was posted in Accounting Issues, Business Commentary, Community of Scholars, Organizational Behaviour, Psychology, Sociology. Bookmark the permalink.

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