Harvard Business Review

The 'Quiet Life' Hypothesis Is Real: Managers Will Put Off Hard Decisions If They Can

Foto: Patrick Pleul/AP

In competitive markets, managers have a strong incentive to give their best effort. But economists have long argued that when companies are insulated from competition, their managers may not be motivated to maximize the profit of the firm and instead may choose to enjoy the “quiet life.” Similarly, without sufficient monitoring by owners of the firms or the stock market, managers might be tempted to enjoy the quiet life instead of making hard decisions.

But are the economists right?..

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