We develop a theory of organization design in which the firm's structure is chosen to mitigate moral hazard problems in the selection and the implementation of projects. For a given set of projects, the divisional structureʺ which gives each agent the full responsibility over a subset of...

The organization of Electronic Dance Music (EDM) events has become a major export product in the Netherlands. In order to respond quickly to the new trends and needs, innovative forms of cooperation between producers are to be set up for the organization of exciting new events. A case study on...

Employees' incentive to invest in their task proficiency depends on the likelihood that they will execute the same tasks in the future. Changes in tasks can be warranted as a result of technological progress and changes in firm strategy as well as from fine-tuning job design and from monitoring...

This article deals with the contribution of organization theory to transaction cost economics from an examination of Williamson's theory of the firm. Borrowing and applying some conclusions of organization theory, Williamson rightly differs from other theories of the firm, particularly in his...

Metaphors are part of our daily lives as they help us understand the world. Economics, as other areas of knowledge, cannot go without metaphors. Transaction Cost Economics (TCE) – a prominent theoretical framework on economic organisation – is no different: it has been built on a set of...

This paper examines optimal decision making under three different organizational forms: committees, hierarchies and polyarchies. Our focus is on the trade-off between errors of rejecting good projects versus errors of accepting bad projects, and on the trade-off between gains from more extensive...

For decades, the literatures on firm capabilities and organizational economics have been at odds with each other, specifically relative to explaining organizational boundaries and heterogeneity. We briefly trace the history of the relationship between the capabilities literature and...

Three experiments demonstrated that the experience of power leads to an illusion of personal control. Regardless of whether power was experientially primed (Experiments 1 and 3) or manipulated through manager-subordinate roles (Experiment 2), it led to perceived control over outcomes that were...

A long-standing question in the organizations literature is whether firms are better-off by using simple or complex representations of their task environment. We address this question by developing a formal model of how firm performance depends on the process by which firms learn and use...