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Consistency in Organization


  • Ekkehart Schlicht


Internal organization relies heavily on psychological consistency requirements. This perspective has been emphasized in modern compensation theory, but has not been extended to organization theory. The idea is developed by starting from Williamson's discussion of idiosyncratic exchange. The perspective sheds new light on several topics in the theory of the firm, like the boundaries of the firm (Williamson's puzzle), the importance of fairness concerns within firms, the attenuation of incentives, or the role of routines. It implies a perceptional theory of the firm that is realistic in the sense advocated by COASE [1937].

Suggested Citation

  • Ekkehart Schlicht, 2008. "Consistency in Organization," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(4), pages 612-623, December.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200812)164:4_612:cio_2.0.tx_2-

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    References listed on IDEAS

    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. R. Isaac & Deborah Mathieu & Edward Zajac, 1991. "Institutional framing and perceptions of fairness," Constitutional Political Economy, Springer, vol. 2(3), pages 329-370, September.
    3. Clark, Gregory, 1984. "Authority and Efficiency: The Labor Market and the Managerial Revolution of the Late Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 44(04), pages 1069-1083, December.
    4. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    5. Moore, John, 1992. "The firm as a collection of assets," European Economic Review, Elsevier, vol. 36(2-3), pages 493-507, April.
    6. Coase, R H, 1978. "Economics and Biology: Evolution, Selection, and the Economic Principle: Discussion," American Economic Review, American Economic Association, vol. 68(2), pages 244-245, May.
    7. Frank, Robert H, 1984. "Are Workers Paid Their Marginal Products?," American Economic Review, American Economic Association, vol. 74(4), pages 549-571, September.
    8. Ernst Fehr & Simon Gaechter, "undated". "Do Incentive Contracts Crowd out Voluntary Cooperation?," IEW - Working Papers 034, Institute for Empirical Research in Economics - University of Zurich.
    9. Schlicht, Ekkehart, 1998. "On Custom in the Economy," OUP Catalogue, Oxford University Press, number 9780198292241, June.
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    Cited by:

    1. Mehrdad Vahabi, 2011. "The Economics of Destructive Power," Chapters,in: Handbook on the Economics of Conflict, chapter 5 Edward Elgar Publishing.
    2. Aidan Walsh, 2011. "Learning from pondlife and fishermen: towards a modular financial services industry," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 19(4), pages 312-322, November.
    3. Stefano Zamagni, 2013. "Cooperative entrepreneurship," Chapters,in: Handbook on the Economics of Reciprocity and Social Enterprise, chapter 9, pages 94-107 Edward Elgar Publishing.
    4. Zamagni, Stefano, 2005. "Per una teoria economico-civile dell'impresa cooperativa," AICCON Working Papers 10-2005, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.

    More about this item

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior


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