misalignment between managers and the firm, these two purposes are in conflict. This is because the worker with the largest private …: employees that create lower expected profits as managers have yet better promotion prospects. That finding still holds when the … firm owner optimally chooses the promotion rule, the degree of delegation, and wage payments to both employees and managers …

leads foreign entrepreneurs to place little reliance on formal contracts in their dealings with local agent managers … industry growth creates a substantial ‘shadow of the future,’ where managers’ outside employment options are relatively limited …