Essays in organizational economics
This thesis consists of three theoretical essays that examine the role of organizational architecture in facilitating organizational adaptation to a changing environment. Chapter 1 develops a model of coordinated adaptation where .an organization needs to respond to incoming information about its environment while at the same time retaining coordination between its activities. It analyzes how the allocation of decision rights inside the organization impacts the quality of decision-making and the accuracy of information transmission when information is both soft and distributed inside the organization. The results show that, contrary to the common intuition, the performance differential between centralized and decentralized decision-making is non-monotone in the importance of coordination. Further, both of these common structures are dominated by asymmetric structures in sufficiently asymmetric environments. Finally, if the incentive conflicts between the participants can be made sufficiently small, centralized decision-making is always dominated by decentralized decision-making. Chapter 2 extends the model developed in Chapter 1 to account for the endogeneity of incoming information and the use of monetary incentives to manage incentive conflicts inside the organization.
Year of publication: |
2007-12-07
|
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Authors: | Rantakari, Heikki |
Other Persons: | Robert Gibbons and Bengt Holström. (contributor) |
Institutions: | Massachusetts Institute of Technology. Dept. of Economics. (contributor) |
Publisher: |
Massachusetts Institute of Technology |
Saved in:
freely available
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