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Keywords = management control systems (MCS), incentive system

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13 pages, 776 KiB  
Article
Do Narcissistic Managers Prefer Incentive Systems Based on Financial Instruments? An Analysis Based on Choice Experiments
by Eva Crespo-Cebada, Carlos Díaz-Caro, Aurora E. Rabazo-Martín and Edilberto J. Rodríguez-Rivero
Sustainability 2021, 13(3), 1255; https://doi.org/10.3390/su13031255 - 26 Jan 2021
Cited by 1 | Viewed by 2462
Abstract
The purpose of this work is to analyse the preferences of Chief Executive Officers (CEOs) in relation to the different components of incentive systems: financial vs. non-financial. The incentive systems could be an instrument for the sustainable development of Firms. Upper Echelons Theory [...] Read more.
The purpose of this work is to analyse the preferences of Chief Executive Officers (CEOs) in relation to the different components of incentive systems: financial vs. non-financial. The incentive systems could be an instrument for the sustainable development of Firms. Upper Echelons Theory establishes that the traits of executives affect the decision-making processes, and among these traits, narcissism is a potentially influential factor in these processes. Therefore, the extent to which the level of narcissism influences the choice of one instrument or another is also analysed. For this purpose, a choice experiment has been carried out to analyse the preferences of CEOs. The questionnaire developed incorporates both the choices about different systems and the NPI-16 test that allows individuals to be classified according to their narcissistic nature. The main results show that, in general, there is a stronger preference for non-financial instruments than for financial instruments in the design of incentive systems. However, narcissistic CEOs show a clear inclination towards financial incentives that bring them benefits rather than provide incentives. Full article
(This article belongs to the Section Economic and Business Aspects of Sustainability)
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