When complete contracting is not possible, allocating control structure becomes the second-best arrangement. This paper analyzes the design of optimal divisional structure within an organization where ex post bargaining between the potential divisional managers is possible. In much the same...

We consider a hierarchical organization with two fully rational agents. The goal of the organization is that of selecting the best alternative out of several available, and agents are heterogenous in the accuracy with which they screen the alternatives. We show that, if internal communications...

In contemporary market economies, firms typically adopt one or another of a small number of standard organizational forms, both in terms of ownership and in terms of commitments to contractual counterparties. This review essay, prepared as a chapter for the forthcoming Handbook of Organizational...