Sixth commentary: Management compensation and tournament theory

1966 ◽  
Vol 9 (1) ◽  
pp. 11-22 ◽  
Author(s):  
Edward E. Lawler

2021 ◽  
pp. 002085232110588
Author(s):  
Tao Li ◽  
Zhenyu M. Wang

The prevalence of top-heavy bureaucracies in non-democracies cannot be explained by the theories of Parkinson, Tullock, Niskanen, or Simon or by classical managerial theories. When bureaucracy positions carry rents, the competition for promotion becomes a rent-seeking process. Borrowing the career-tournament theory framework from managerial scholarship, we argue that top-heavy bureaucracy resembles a tournament with too many finalists. When rent is centralized at the top (i.e. power centralization), as is the case in many non-democracies, the optimal bureaucracy should be top-heavy, accommodating and encouraging relatively more finalists at the top to compete for the final big prize. We provide suggestive evidence by analyzing ministry organizations in China (1993–2014) and Russia (2002–2015). After some fluctuations, the shape of Russian ministries eventually converged with that of China. In the steady state, their ministry shapes are far more top-heavy than what is prescribed by managerial theories. At the micro-level, ministry power centralization, measured by the perceived influence of the ministers, is correlated with ministry top-heaviness in Russia. Points for practitioners Our theory suggests that a top-heavy authoritarian bureaucratic structure naturally follows from a back-loaded sequential career tournament and an effort-maximizing bureaucratic leader. Our findings also suggest that Chinese and Russian ministries both converge to a highly top-heavy structure in the long run. We demonstrate that the top-heavy structure first arose during the planned-economy experiment in the Soviet Union. Our research sheds new light on public-sector reforms that aim to reduce bureaucracy top-heaviness in autocracies.


2021 ◽  
Author(s):  
◽  
David Howell Shufflebotham

<p>This research is a study of the promotion to partner process in large law firms in the United Kingdom (UK). It is concerned with the application of tournament theory to such firms. In particular it is an examination of the ability of associate lawyers to monitor the implied promise that, in prescribed circumstances, they will have the opportunity of becoming a partner at their firms. In order to identify whether or not the rules of tournament theory on promotion to partnership hold true when set against the experiences of lawyers in large law firms operating in the UK, I established a theoretical framework based on a review of the relevant literature. I then tested that theoretical framework with data from two sources: case study interviews with partners at a large UK law firm; and a questionnaire distributed to a wider sample group of partners across a number of large UK law firms. The research found strong evidence to support the application of the core elements of tournament theory to large law firms in the UK. The research also found, however, that the implied promise envisaged by tournament theory was not the promise monitored by the individuals who took part in the research project.</p>


Sign in / Sign up

Export Citation Format

Share Document