Working paper

Failure To Delegate And Loss Of Control

Year:

2004

Published in:

Governance and the Efficiency of Economic Systems
Inefficient Micromanagement
Delegation
Coordination Failure
Communication Constraints
Equilibrium

This paper provides an explanation for the frequently observed phenomenon of 'inefficient micromanagement'. I show that a supervisor may get comprehensively involved into activities of a subordinate although a better option of delegation is available. This inefficiency persists in the absence of conflict of preferences and even as the cost of delegation becomes zero. The paper also demonstrates that imposing constraints on communication with a subordinate can be beneficial for a superior.

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