Despite the “1/
N
problem” associated with profit sharing, the empirical literature finds that sharing profits with workers has a positive impact on work team and firm performance. We examine one ...possible resolution to this puzzle by observing that, although the incentive to work harder under profit sharing is weak, it might be sufficient to motivate workers to report each other for shirking, especially if the workers are reciprocally minded. Our model provides the rationale for this conjecture, and we discuss the results of an experiment finding that workers who share in firm profits are more willing to provide accurate information about their peers to management and that profit sharing is most effective when peer reporting is possible.
The online appendix is available at
https://doi.org/10.1287/mnsc.2017.2831
.
This paper was accepted by Uri Gneezy, behavioral economics.
Cooperating with competitors can be a mutually beneficial strategy for companies. To achieve continuous gains from the partnership, profit-sharing rules for the collective benefits are critical. This ...paper proposes a new allocation scheme that focuses on sustainable relationships based on cooperative game theory. Our min-variance solution deploys joint profits by minimizing the intent to form sub-groups, thus ensuring the alliance's stability. The min-variance is reasonable in a network collaboration where the preservation of the network itself is essential. By application to a numerical example of an airline joint venture, we examine the validity of the proposed distribution rule in the cooperation-allocation problem. The collective surplus of logistics collaboration is suggested by a mixed-integer programming model to solve the optimal value of combinations of the multi-commodity flow problem under the network shared. In addition, the results are interpreted by comparison with other solutions in cooperation game theory, such as the Shapley value, the τ–value, and the nucleolus. We offer further insights into changes in profit-sharing using a sensitivity analysis considering efficiency abatement.
•Profit-sharing including the revenue and the cost of an airline strategic alliance.•An application of a cooperative game approach in a logistics collaboration.•Benefit from network collaboration through efficient resource allocation.•A sharing rule for the sustainable supply chain partnership.
Drawing upon line-of-sight (Lawler, 1990, 2000; Murphy, 1999) as a unifying concept, we examine the cross-level influence of organizational use of individual pay-for-performance (PFP), theorizing ...that its impact on individual employees' performance-reward expectancy is boosted by the moderating effects of immediate group managers' contingent reward leadership and organizational use of profit-sharing. Performance-reward expectancy is then expected to mediate the interactive effects of individual PFP with contingent reward leadership and profit-sharing on employee job performance. Analyses of cross-organizational and cross-level data from 912 employees in 194 workgroups from 45 companies reveal that organizations' individual PFP was positively related to employees' performance-reward expectancy, which was strengthened when it was accompanied by higher levels of contingent reward leadership and profit-sharing. Also, performance-reward expectancy significantly transmitted the effects of individual PFP onto job performance under higher levels of contingent reward leadership and profit-sharing, thus delineating cross-level mediating and moderating processes by which organizations' individual PFP is linked to important individual-level employee outcomes. Several theoretical and practical implications are discussed.
In modern transportation systems, the potential for further decreasing the costs of fulfilling customer requests is severely limited while market competition is constantly reducing revenues. However, ...increased competitiveness through cost reductions can be achieved if freight carriers cooperate in order to balance their request portfolios. Participation in such coalitions can benefit the entire coalition, as well as each participant individually, thus reinforcing the market position of the partners. The work presented in this paper uniquely combines features of routing and scheduling problems and of cooperative game theory. In the first part, the profit margins resulting from horizontal cooperation among freight carriers are analysed. It is assumed that the structure of customer requests corresponds to that of a pickup and delivery problem with time windows for each freight carrier. In the second part, the possibilities of sharing these profit margins fairly among the partners are discussed. The Shapley value can be used to determine a fair allocation. Numerical results for real-life and artificial instances are presented.
This article analyses the linkages among group incentive methods of compensation (broad‐based employee ownership, profit sharing and stock options), labour practices, worker assessments of workplace ...culture, turnover and firm performance in firms that applied to the ‘100 Best Companies to Work For in America’ competition from 2005 to 2007. Although employers with good labour practices self‐select into the 100 Best Companies firms sample, which should bias the analysis against finding strong associations among modes of compensation, labour policies and outcomes, we find that employees in the firms that use group incentive pay more extensively participate more in decisions, have greater information sharing, trust supervisors more and report a more positive workplace culture than in other companies. The combination of group incentive pay with policies that empower employees and create a positive workplace culture reduces voluntary turnover and increases employee intent to stay and raises return on equity.
In Collective Courage, Jessica Gordon Nebhard chronicles African American cooperative
business ownership and its place in the movements for Black civil rights and economic
equality. Not since Du ...Bois’ 1907 Economic Cooperation among Negroes has there been
a full-length, nation-wide study of African American cooperatives. Collective Courage
extends that story into the twentieth century. Many of the players are well-known in
the history of the African American experience: W. E. B. Du Bois, A. Philip Randolph
and the Women’s Auxiliary of the Brotherhood of Sleeping Car Porters, Nannie Helen
Burroughs, Fannie Lou Hamer, Ella Jo Baker, George Schuyler and the Young Negroes
Cooperative League, the Nation of Islam, and the Black Panther Party. Adding the
cooperative movement to Black history provides a retelling of the African American
experience, with an increased understanding of African American collective economic
agency and grassroots economic organizing.
To tell the story, Gordon Nembhard pores over newspapers, period magazines and
journals; co-ops’ articles of incorporation, minutes from annual meetings, newsletters,
budgets and income statements; scholarly books, memoirs and biographies to reveal the
achievements and challenges of Black co-ops, collective economic action, and social
entrepreneurship. She also uses mixed methods economic analysis of quantitative and
qualitative data, theoretical analysis and applied theory to understand the effectiveness of
the particular practices and/or strategies documented. Themes of economic independence,
the critical role of women and youth in the African American cooperative movement, and
the use of cooperatives by Black organizations for community economic development
are interwoven into a linear treatment of the development of cooperatives among
African Americans in the nineteenth and twentieth centuries. Gordon Nembhard finds
that African Americans, as well as other people of color and low-income people, have
benefitted greatly from cooperative ownership and democratic economic participation
throughout the nation’s history.
This study aims to determine how agency theory is related to the trustworthy profit sharing in suppressing the adverse selection problem. This research is a qualitative research. The type of research ...that researchers use is library research. Library research is a form of research carried out by collecting various kinds of references which are the main source for conducting research, references which are the primary sources in this research are articles published in journals, and other written articles. The results of this study explain that when the company divides the ownership structure and also the management of the company, there will be problems in it, the problem that arises is that there is an agency problem. Agency problems are divided into two forms, namely moral hazard and also adverse selection. One way to solve this problem is to apply the concept of a trustworthy profit sharing.
In this study, a dual-channel supply chain (SC) comprising one manufacturer and one packaging company is considered under price and quality dependent demand. The manufacturer and packaging company ...compete on offered selling price and quality decisions. For the first time, this study investigates how the packaging company can influence the quality of products through packaging products. We also analyze how different game structures affect the optimal pricing and quality decisions as well as SC members' profit. In doing so, we model the investigated SC under three scenarios: (1) non-cooperative game, (2) cooperative game through revenue-sharing contract, and (3) cooperative game through profit-sharing contract. The results show that the competitive game of manufacturer and packaging company is highly beneficial for price-seeking customers. Moreover, from quality-seeking customers’ perspective, the cooperation of manufacturer and packaging company under profit-sharing contract is more preferable. Furthermore, when the customers' demand is highly sensitive to the products quality, the cooperation of manufacturer and packaging company through profit-sharing contract is more beneficial for them.
•Quality improvement is proposed through products packaging in a supply chain.•Pricing and quality decisions are analyzed under price and quality dependent demand.•Channel selection is analyzed under competition and cooperation models.•Coordination contracts are used to analyze the performance of whole system.
This research aims to explore key success factors in profit-sharing-based contracts. Profit-sharing-based contracts such as mudharabah and musharakah carried out by Islamic banks are the core of ...financing in Islamic banks because they are directly related to the productive sector. The impact of this type of financing is greater for the industrial world than that of buying and selling-based financing. However, the facts show that there has been a decrease in the performance of the percentage of profit-sharing-based financing during the 2019-2022 period, and conversely, buying and selling-based financing has increased. In addition, the total operating profit from profit-sharing-based financing has also decreased during the 2019-2022 period. Mudharabah financing is mainly carried out on the basis of trust that arises between the owner of the funds (shahibul maal) and the business manager (mudharib). This study uses a qualitative approach with a literature review in order to gain a comprehensive understanding of the key success factors in profit-sharing-based financing contracts. Key success factors that are deepened based on the trust metaphor include knowledge of the rights and obligations of mudharib and shahibul maal, honest reporting, monitoring, and guarantees. In fulfilling the Trust, each party is required to have adequate knowledge of their rights and obligations in mudharabah and musharakah contracts. The honest and adequate presentation of financial information is disclosed by mudharib with reference to relevant Sharia accounting standards such as PSAK 101, PSAK 105, and PSAK 106. This disclosure is a form of mudharib's responsibility to shahibul maal. Regular monitoring can be carried out by shahibul maal actively or passively. Guarantees can be applied in sharing-based financing contracts other than guarantees provided by mudharib. This study produces theoretical contributions to science in the field of Sharia accounting and practice, especially for practitioners in the Sharia banking industry.
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