Consistency in Organization
AbstractInternal organization relies heavily on psychological consistency requirements. This perspective has been emphasized in modern compensation theory, but has not been extended to organization theory. The idea is developed by starting from Williamson's discussion of idiosyncratic exchange. The perspective sheds new light on several topics in the theory of the firm, like the boundaries of the firm (“Williamson's puzzle”), the importance of fairness concerns within firms, the attenuation of incentives, or the role of routines. It implies a “perceptional” theory of the firm that is “realistic” in the sense advocated by Coase (1937).
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Bibliographic InfoPaper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 6569.
Date of creation: 20 Oct 2008
Date of revision:
theory of the firm; hierarchy; evolutionary theory of the firm; perceptional theory of the firm; consistency; small numbers; centralization paradox; Williamson's puzzle; compensation; boundaries of the firm; fairness; small numbers; idiosyncratic exchange; entitlements; obligations; routines; framing;
Other versions of this item:
- Ekkehart Schlicht, 2008. "Consistency in Organization," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(4), pages 612-623, December.
- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-28 (All new papers)
- NEP-BEC-2008-10-28 (Business Economics)
- NEP-CBE-2008-10-28 (Cognitive & Behavioural Economics)
- NEP-HPE-2008-10-28 (History & Philosophy of Economics)
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