Table of Contents

The Economics of Motivation and Organization

The Economics of Motivation and Organization

An Introduction

Peter-J. Jost

In this unique book, Peter-J. Jost provides a comprehensive economic-psychological approach for successfully managing employees. Based on the analysis of the employee’s individual work behavior, he illustrates that instead of treating employees as input elements of production, and managing and controlling their work, organizations need to motivate their employees to act in the interest of the firm and in accordance with its goals.

Chapter 1: Individual Differences between Employees

Peter-J. Jost

Subjects: business and management, strategic management, economics and finance, economic psychology


Motive dispositions are the obvious key to understanding a motivational sequence, for without knowing what motives people bring to a situation, it is impossible to know how they will react to a demand or an incentive. (McClelland, 1985) Any attentive reader of the business news is familiar with the following names: Lee Iacocca, Bill Gates, Akio Morita and Ken Olson, or in Germany Edzard Reuter or August Schrempp. All of these corporate executives have in common that they are primarily held responsible for both the successes and failures of their companies. Take Lee Iacocca as an example, who was the face of Chryslerís resurgence in the 1980s, or Ken Olson, the founder of Digital Equipment Corporation, who was caught unawares by the revolution in personal computing and who was blamed for the firmís financial malaise throughout the following years. Of course, a companyís success does not only depend on its Chief Executive Officer or President. The capability to produce exactly the goods or to provide exactly those services which are in high demand at a given point in time is not the result of the activities of any single individual only, but instead it is the product of the behavior of all members of the firm. This entails the essential insight that the productivity of a company, the quality of its goods produced, the creativity involved in developing new products or approaches, or its customer focus all depend on the interactions of all those individuals who are involved in their provision. These include the top manager who plays a central role in defining the company strategy as well as the department head who directs and coordinates ëday-to-day businessí and who has to respond to issues and requests raised by her subordinates as well as the worker at the production line who is responsible for assembling a certain set of parts. The effort that each of these employees invests into his tasks within the organization contributes to determining the companyís success in the market. In general, of course, we would expect the individual contribution of the CEO to greatly outweigh that of the production worker.

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