We model a firm in an institutional market setting, consisting of a production technology and its governance. The governance consists of a hierarchical firm structure, a cost efficiency parameter,and an internal pay system. The depth of the firm is determined by profit maximization under the...

We explore the link between a firm's organization of research - specifically, its choice to operate a centralized or decentralized R&D structure - and the type of innovation it produces. We propose that by reducing the internal transaction costs associated with R&D coordination across units,...

Teams face a variety of strategic circumstances, and it is socially beneficial for teams to cooperate in productive but not in corrupt ones. Understanding the behavior and social impact of teams requires understanding how cooperation in one situation depends on expectations of cooperation in...

This paper investigates how information uncertainty, measured through variation in the informativeness of the public information environment, shapes the organizational design choices of firms. I posit that, when faced with higher uncertainty about demand and supply, managers are more likely to...

This survey provides an overview of theoretical and empirical research on information flows in corporations. It highlights key frictions preventing effective information flows and discusses how organizational structure and corporate governance can alleviate these frictions, focusing on three...

There is a striking difference between the large number of theoretical papers on firm organization and the lack of quantitative empirical evidence. If on the one side economists are increasingly concerned with organization of firms, on the other side organization still remains an ambiguous...

Based on network analytical techniques, in this paper I extend information-processing theory to the micro level and develop a new approach to directly analyze information processing within individual organizations. I introduce the concept of information fit for measuring organizational...

This paper shows how fixed costs can play an important role in determining the structure of organizations. Applications considered include layoffs, downsizing, heterogeneity among firms, and the structure of hierarchies. Agency problems as a source of fixed costs are also considered.

Previous research on e-commerce has analyzed its influence on organizational structure, brand management, and IT structure separately. Drawing on transaction cost theory, we analyze the simultaneous impacts of business-to-consumer (B2C) e-commerce on organizational structure, brand architecture,...