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Conflict and Consensus: A Theory of Control in Organisations


  • Banerjee Priyodorshi

    () (Planning Unit, Indian Statistical Institute)


A principal, requiring a team to implement a project by proposing and jointly executing a technique, may benefit from choosing one with internal disharmony. When superior policy proposition by a member is rewarded with unitary executive control, the benefit of control is increasing in the degree of conflict. Hence, the presence of discord can raise incentives to take effort towards technique proposition by inducing competition for control, and thereby enhance average proposal quality. The principal may thus choose a fractious team when the losses from lower consensus in project execution are limited. These effects can be exacerbated in large teams, and lead to teamwork dominating individual production.

Suggested Citation

  • Banerjee Priyodorshi, 2008. "Conflict and Consensus: A Theory of Control in Organisations," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 8(1), pages 1-35, February.
  • Handle: RePEc:bpj:bejtec:v:8:y:2008:i:1:n:4

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