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Optimal Coordination in Hierarchies Author info | Abstract | Publisher info | Download info | Related research | Statistics Andrea Patacconi
This paper studies the optimal allocation of coordination responsibilities in organizations where duplication of effort is a serious concern. The planner`s objective is to minimize a weighted average of the wage bill and the cost of delay. The paper provides conditions under which, in balanced hierarches, communication effort is increasing and the span of control is decreasing as one travels up the hierarchy, with equalities holding if wages are negligible relative to the weight attached to the cost of delay. The analysis suggests that concerns for fast decision-making may be key in explaining the recent trend towards empowerment in firms. Several variants of the basic model are studied, including one focusing on communicative skills and another in which, as urgency increases, the optimal span of control increases and the hierarchy flattens. Evidence supporting these results is discussed.
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number
238.
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Date of creation: 2005Date of revision:
Handle: RePEc:oxf:wpaper:238Contact details of provider: Postal: Manor Rd. Building, Oxford, OX1 3UQ Email: Web page: http://www.economics.ox.ac.uk/ More information through EDIRC
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Keywords: Coordination Hierarchy Duplication Delay Information Processing Other versions of this item:
Find related papers by JEL classification: D21 - Microeconomics - - Production and Organizations - - - Firm Behavior L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
This paper has been announced in the following NEP Reports :
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