The effects of target difficulty and relative ability on managers’ delegation decisions

Managers often need to choose between handling a task themselves and delegating it to a subordinate. We examine how the difficulty of the performance target set for the task affects such choices. We theorize that while managers tend to delegate more when the subordinate has a higher ability to handle the task, they will also use delegation to influence the perceived responsibility for the task outcome. Accordingly, we hypothesize that managers will tend to delegate tasks with difficult targets to avoid potential blame and hold on to tasks with easy targets to claim potential credit, and that the former tendency will be stronger than the latter. Using an experiment, we find evidence consistent with the predicted effect of target difficulty, but not the hypothesized asymmetry. A supplemental experiment with a slightly modified design confirms the results of our main experiment and also provides evidence of the hypothesized interaction. In addition, our results show that difficult targets can lead to “over-delegation” and easy targets can lead to “under-delegation”, potentially destroying firm value.