040439 VK IM: International Human Resource Management (2008S)

Course Outline

Setting motivating incentives is clearly of prime importance for firm success. However, incentives must also be set 'properly'; e. g. the incentive scheme must be efficient rather than merely effective. The induced actions of the agents must serve the firm's objective at minimum costs. This lecture focuses on the optimal motivation of agents via incentives and contract design. Problems arise due to asymmetric information structures, imperfect commitment, and bounded rationality.

I. Introduction

I.1. Case Study - Salomon Brothers
Milgrom, P. and J. Roberts, Economics, Organization and Management, Englewood Cliffs, New Jersey: Prentice Hall, 1992, p. 9-12.

II. Foundations of Imperfect Commitment Problems

Milgrom, P. and J. Roberts, Economics, Organization and Management, Englewood Cliffs, New Jersey: Prentice Hall, 1992, p. 133-140.
Kräkel, M., Organisation und Management, Tübingen: Mohr-Siebeck, 1999, S. 36- 49.

III. Foundations of Adverse Selection Problems

Milgrom, P. and J. Roberts, Economics, Organization and Management, Englewood Cliffs, New Jersey: Prentice Hall, 1992, p. 149-159, 164-165.
Jost, Peter-J. (Hrsg.), Die Prinzipal-Agenten-Theorie in der Betriebswirtschaftslehre, Stuttgart: Schäffer-Poeschel, 2001, Kapitel 2, Abschnitte 2.3 und 2.4.

IV. Foundations of Moral Hazard Problems

Milgrom, P. and J. Roberts, Economics, Organization and Management, Englewood Cliffs, New Jersey: Prentice Hall, 1992, Chapter 6.
Jost, Peter-J. (Hrsg.), Die Prinzipal-Agenten-Theorie in der Betriebswirtschaftslehre, Stuttgart: Schäffer-Poeschel, 2001, Kapitel 2, Abschnitt 2.2.

V. The LEN-Model of Moral Hazard

Milgrom, P. and J. Roberts, Economics, Organization and Management, Englewood Cliffs, New Jersey: Prentice Hall, 1992, Chapter 7.
Kräkel, M., Organisation und Management, Tübingen: Mohr-Siebeck, 1999, S. 59- 77.
Jost, Peter-J. (Hrsg.), Die Prinzipal-Agenten-Theorie in der Betriebswirtschaftslehre, Stuttgart: Schäffer-Poeschel, 2001, Kapitel 10.

VI. Rent-Seeking, Unproductive Activities, and Efficiency

Milgrom, P. and J. Roberts, Economics, Organization and Management, Englewood Cliffs, New Jersey: Prentice Hall, 1992, Chapter 8.
Jost, Peter-J. (Hrsg.), Die Prinzipal-Agenten-Theorie in der Betriebswirtschaftslehre, Stuttgart: Schäffer-Poeschel, 2001, Kapitel 3.
Kräkel, M., Organisation und Management, Tübingen: Mohr-Siebeck, 1999, S. 100-118.

Readings

It is strongly recommended that students prepare selected chapters from textbooks listed in the course outline above. In particular, the German textbooks those students' understanding of the lecture content whose English language skills are not so well developed.

Grading

This class is immanently relevant for examination ("dieser Kurs ist eine Lehrveranstaltung mit immanentem Prüfungscharakter"). Students can earn a maximum of 50 points on each of the two exams, the midterm and the final. To pass the course students must collect a total of 50 points or more.
Make-up exams are only available for students on sick leave (documented by immediately handing in a doctor's sickness note at the chair's office) or leaves supported by formal decision of the university, the faculty, and/or the institute.