?Putting one over on the boss?: The political economy of strategic behavior in organizations

Abstract

The chief executive of an organization is often dependent on his subordinates for formulating the set of options he will consider. He may also be dependent on them for advice as to which option to choose. Due to the limits on his time, energy, and attention, he cannot always monitor the subordinates as they formulate the options and settle on their recommendations. He must, to some extent, accept their recommendations as reasonable estimates of what is good organizational policy. But what the subordinates think is good policy often diverges from what the boss thinks is good policy. What is good for the subordinates may also diverge from what is good for their boss. The fact that their views and interests diverge from his gives them a motive to manipulate his choices to their own ends. The fact that he has difficulty monitoring their behavior makes it possible for them to manipulate his choices. If the subordinates want to manipulate his choices and can do so 'without being found out,' it is not unreasonable to expect them to do so: they will tell him what they want him to hear and not what his interests and concerns require him to hear. That choices can be manipulated is a generic feature of all social institutions. As Gibbard (1973) and Satterthwaite (1975) have formally demonstrated, for every nondictatorial way of making social choices there will exist situations in which someone can improve outcomes for himself by voting for in our terms, recommending to the boss something other than what he truly most prefers.' Hence the problem of hierarchical distor-