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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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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. 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.
  2. repec:hal:wpaper:hal-00628647 is not listed on IDEAS
  3. repec:hal:cepnwp:hal-00628647 is not listed on IDEAS
  4. Ola Kvaløy & Trond E. Olsen, 2008. "Relative performance evaluation, agent hold-up and firm organization," NBER Chapters, in: Organizational Innovation and Firm Performance, pages 229-241 National Bureau of Economic Research, Inc.
  5. Olivier Sautel, 2007. "L'évolution de la théorie des contrats incomplets face à la dé-intégration verticale," Revue d'économie industrielle, De Boeck Université, vol. 0(1), pages 5-5.

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