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Coordination and the Structure of Firms

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  • Stanley Reiter

Abstract

This paper presents a model in which organizational structure emerges as the solution of an optimization problem. The objective is to compute the desired decisions in a given class of economic environments, and the constraints express limitation on the abilities of agents to compute and communicate. The "variable" to be solved for, whose values are interpreted as different organizational structures, is a type of directed graph (an EADAG). Depending on its structure, a solution graph may represent organization into one or more informationally independent units. The structure of solution graphs is derived from the nature of the coordination problem as expressed by the desired decision function.

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Bibliographic Info

Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 1121.

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Date of creation: May 1995
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Handle: RePEc:nwu:cmsems:1121

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Postal: Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014
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Web page: http://www.kellogg.northwestern.edu/research/math/
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Cited by:
  1. John H. Miller, 1995. "Evolving Information Processing Organizations," Working Papers 95-06-053, Santa Fe Institute.
  2. Van Zandt, Timothy, 2003. "Real-Time Hierarchical Resource Allocation with Quadratic Costs," CEPR Discussion Papers 4022, C.E.P.R. Discussion Papers.
  3. Yannis M. Ioannides, 2003. "Complexity and Organizational Architecture," Discussion Papers Series, Department of Economics, Tufts University 0313, Department of Economics, Tufts University.

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