Authority in the Context of Distributed Knowledge
AbstractThe notion of distributed knowledge is increasingly often invoked in discussions of economic organization. In particular, the claim that authority is inefficient as a means of coordination in the context of distributed knowledge has become widespread. However, very little analysis has been dedicated to the relation between economic organization and distributed knowledge. In this paper, we concentrate on the role of authority as a coordination mechanism under conditions of distributed knowledge, and also briefly discuss other issues of economic organization. We clarify the meanings of authority and distributed knowledge, and criticize the above claim by arguing that authority may be a superior mechanism of coordination under distributed knowledge. We also discuss how distributed knowledge influences the boundaries of firms. Our arguments rely on insights in problem-solving and on ideas from organizational economics.
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Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 03-08.
Date of creation: 2003
Date of revision:
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Distributed knowledge; existence of authority; problem-solving; the boundaries of the firm;
Find related papers by JEL classification:
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executives; Executive Compensation
This paper has been announced in the following NEP Reports:
- NEP-CBE-2003-10-05 (Cognitive & Behavioural Economics)
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