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Organizational Design, Technology and the Boundaries of the Firm

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  • Maija Halonen

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Abstract

Focus - specialization and specific technology - improves productivity but leads to more dependency and opens a door for power problems. We analyze how organizational design and the choice of technology interact with the allocation of ownership in minimizing the holdup problem in the property rights theory of Grossman-Hart-Moore. We find a novel motive for job rotation: rotation reduces holdup problems in an integrated firm. We also show that holdup problem in specific physical capital is removed in the integrated firm while holdups in specific human capital remain.

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File URL: http://www.efm.bris.ac.uk/economics/working_papers/pdffiles/dp02540.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Bristol, UK in its series Bristol Economics Discussion Papers with number 02/540.

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Length: 31 pages
Date of creation: Aug 2002
Date of revision:
Handle: RePEc:bri:uobdis:02/540

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Keywords: boundaries of firm; organizational Design; technology; property rights;

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References

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Cited by:
  1. Kvaløy, Ola & Olsen, Trond E., 2008. "Relative performance evaluation, agent hold-up and firm organization," Journal of the Japanese and International Economies, Elsevier, vol. 22(2), pages 229-241, June.
  2. Olivier Sautel & Cécile Cézanne, 2007. "The Human Capital-Intensive Firm and Coordination: Redefined Integration and Disintegration," CEPN Working Papers hal-00628647, HAL.
  3. Olivier Sautel & Cécile Cézanne-Sintès, 2007. "Firme intensive en capital humain et coordination : vers une redéfinition du rapport entre intégration et dé-intégration," Post-Print hal-00331454, HAL.

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