Wednesday, March 16, 2005

The economically rational way to organize things is to give people financial incentives to act the way you want. If you want executives to generate profits, for instance, one thing you can do is promise them large bonuses for making financial targets. Which almost guarantees that you'll show hefty profits on the books.

Of course, there's more than one way to make that happen. One is to actually improve the health of your business. Another is to cook the books, take the bonus and run.


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