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The Uneasy Organizational Matching Between Distribution of Knowledge, Divisionof Labor and Incentive Governance

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  • Giovanni Dosi
  • Daniel Levinthal
  • Luigi Marengo

Abstract

In this paper we present a general model of organizational problem-solving in which organizations engage into an activity of cognition (understanding the world in which they operate) and an activity of action (implementing those policies which cognition indicates as targets which better fit the world s characteristics). Both cognition and action are adaptively determined as the organization faces limitations in the cognitive capabilities of its members and in its control functions. Interde-pendencies among relevant dimensions of the environment and among basic operational tasks are only partly understood. The model allows us to study various combinations of decompositions of cognition and action and various stylized reward systems. In particular, we can address issues of centralization vs. decentralization of cognition, production and rewards schemes and the possible complementarities among these choices.

Suggested Citation

  • Giovanni Dosi & Daniel Levinthal & Luigi Marengo, 2002. "The Uneasy Organizational Matching Between Distribution of Knowledge, Divisionof Labor and Incentive Governance," LEM Papers Series 2002/26, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    • Handle: RePEc:ssa:lemwps:2002/26
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    References listed on IDEAS

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    1. Giovanni Dosi & Daniel A. Levinthal & Luigi Marengo, 2003. "Bridging contested terrain: linking incentive-based and learning perspectives on organizational evolution," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 12(2), pages 413-436, April.
    2. Page, Scott E, 1996. "Two Measures of Difficulty," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 321-346, August.
    3. Marengo, Luigi, et al, 2000. "The Structure of Problem-Solving Knowledge and the Structure of Organizations," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 9(4), pages 757-788, December.
    4. Scott E. Page, 1996. "Two measures of difficulty (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 321-346.
    5. Carliss Y. Baldwin & Kim B. Clark, 2000. "Design Rules, Volume 1: The Power of Modularity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024667, December.
    6. Lane, David A, 1993. "Artificial Worlds and Economics, Part I," Journal of Evolutionary Economics, Springer, vol. 3(2), pages 89-107, May.
    7. Cohen, Michael D, et al, 1996. "Routines and Other Recurring Action Patterns of Organizations: Contemporary Research Issues," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 5(3), pages 653-698.
    8. Daniel A. Levinthal & Massimo Warglien, 1999. "Landscape Design: Designing for Local Action in Complex Worlds," Organization Science, INFORMS, vol. 10(3), pages 342-357, June.
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    Cited by:

    1. Stefano Brusoni & Luigi Marengo & Andrea Prencipe & Marco Valente, 2004. "The Value and Costs of Modularity: A Cognitive Perspective," SPRU Working Paper Series 123, SPRU - Science Policy Research Unit, University of Sussex Business School.
    2. Giovanni Dosi & Marco Faillo & Luigi Marengo, 2003. "Organizational Capabilities, Patterns of Knowledge Accumulation and Governance Structures in Business Firms. An Introduction," LEM Papers Series 2003/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Leonardo Bargigli, 2005. "An evolutionary model for the dynamics of vertical integration and network-based production," Industrial Organization 0509002, University Library of Munich, Germany.
    4. Leonardo Bargigli, 2005. "The limits of modularity in innovation and production," KITeS Working Papers 176, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Sep 2005.
    5. Giovanni Dosi & Marco Faillo & Luigi Marengo & Daniele Moschella, 2011. "Toward Formal Representations of Search Processes and Routines in Organizational Problem Solving. An Assessment of the State of the Art," LEM Papers Series 2011/04, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

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