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A Linear Compensation Scheme Resolving Inter-Departmental Conflicts

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Authors
Nam, Ick-Hyun
Issue Date
1998-12
Publisher
College of Business Administration (경영대학)
Citation
Seoul Journal of Business, Vol.4 No.2, pp. 27-54
Keywords
marketingoperations Interface
Abstract
In this paper, we deal with inter-departmental conflicts such as

marketing-manufacturing conflict We show that the popular

compensahon schemes such as the ones based on each party's own

performance and/or overall performance can not induce the Pareto-

Optimal effort from participants. By making one party's reward

dependent on the other party's performance in addition to its own and

overall performances. we can induce each party to put the Pareto-

Optimal effort. By constructing an appropnate compensation scheme,

we can resolve the conflict between participating departments and

induce optimal amount of cooperatwe effort.
ISSN
1226-9816
Language
English
URI
http://hdl.handle.net/10371/1840
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College of Business Administration/Business School (경영대학/대학원)Dept. of Business Administration (경영학과)Seoul Journal of BusinessSeoul Journal of Business Volume 04, Number 2 (1998)
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