This paper examines the optimal structure of hierarchies when workers differ in the range of tasks they can perform. A hierarchical system may reduce costs by allowing most tasks to be handled by unskilled workers. This may however increase delay for those tasks which must pass through several layers before reaching the appropriate level. The paper characterises an optimal hierarchy when such a trade-off exists.
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number
034.
Find related papers by JEL classification: D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
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