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Two measures of organizational flexibility

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Author Info
Fioretti, Guido

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Abstract

Since the second half of the past century, increasingly flexible organizational forms are appearing among firms. However, while hierarchies are easily described, too few mathematical tools are available for flexible organizations. In this article, two measures are proposed in order to assess the state and trend of flexible organizations. The first of these measures is based on information waste, which occurs whenever information is classified into categories. The second measure is based on duplication of operations. The underlying idea is that firms have an endogenous drive towards organizational configurations where waste of information and duplication of operations are minimized. However, environmental uncertainty may require some flexibility, which is ensured by cognitive processes that discard some information as well as by parallel undertaking of similar actions.

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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8204.

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Date of creation: 09 Apr 2008
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Handle: RePEc:pra:mprapa:8204

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Related research
Keywords: Flexible structures; New organizational forms; Firm restructuring; Theory of the Firm;

Other versions of this item:

Find related papers by JEL classification:
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
D29 - Microeconomics - - Production and Organizations - - - Other

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  6. Sah, Raaj Kumar & Stiglitz, Joseph E, 1988. "Committees, Hierarchies and Polyarchies," Economic Journal, Royal Economic Society, vol. 98(391), pages 451-70, June. [Downloadable!] (restricted)
  7. Nooteboom, Bart, 2006. "Beyond Penrose : a cognitive theory of the firm," Discussion Paper 34, Tilburg University, Center for Economic Research. [Downloadable!]
  8. Sah, Raaj Kumar & Stiglitz, Joseph E, 1986. "The Architecture of Economic Systems: Hierarchies and Polyarchies," American Economic Review, American Economic Association, vol. 76(4), pages 716-27, September. [Downloadable!] (restricted)
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  9. Van Zandt, Timothy, 1995. "Hierarchical computation of the resource allocation problem," European Economic Review, Elsevier, vol. 39(3-4), pages 700-708, April. [Downloadable!] (restricted)
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  10. Knott, Anne Marie & McKelvey, Bill, 1999. "Nirvana efficiency: a comparative test of residual claims and routines," Journal of Economic Behavior & Organization, Elsevier, vol. 38(4), pages 365-383, April. [Downloadable!] (restricted)
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