Design of integrated mechanisms for organizational behavior control

A mathematical model and a notation are developed of integrated mechanisms for problems of organizational behavior management. Singular basic mechanisms (resource allotment mechanisms, incentive schemes, monitoring and audit procedures) are combined into an acyclic graph of a multi-stage game, which reflects the structure of a business process in an organization. Instead of stochastic games on graphs, in this notation not just standard normal-form games but sophisticated principal-agent mechanisms with incomplete and asymmetric information can be located in graph nodes. Integrated mechanisms are analyzed using a backward induction procedure through an acyclic graph of a multi-stage game, which models the considered organizational interaction. This approach allows to reuse the best practices of organizational mechanisms developed by mechanism design and the theory of organizational behavior control for typical situations of principal-agent interaction that arise in managerial practice. These singular mechanisms are used as building blocks when a complex integrated mechanism is constructed, while their optimality and strategyproofness are preserved. Efficiency of alternative basic mechanisms (e. g. different auction rules) can be tested against a specific position (a node of a multi-stage graph game) in an integrated mechanism. The method is illustrated by simple examples of the design of integrated mechanisms for resource allotment, incentives' provision, and monitoring, and directions of prospective studies are outlined.