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Authority in the Context of Distributed Knowledge

Author

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  • Kirsten Foss
  • Nicolai J. Foss

Abstract

The notion of distributed knowledge is increasingly often invoked in discussions of economic organization. In particular, the claim that authority is inefficient as a means of coordination in the context of distributed knowledge has become widespread. However, very little analysis has been dedicated to the relation between economic organization and distributed knowledge. In this paper, we concentrate on the role of authority as a coordination mechanism under conditions of distributed knowledge, and also briefly discuss other issues of economic organization. We clarify the meanings of authority and distributed knowledge, and criticize the above claim by arguing that authority may be a superior mechanism of coordination under distributed knowledge. We also discuss how distributed knowledge influences the boundaries of firms. Our arguments rely on insights in problem-solving and on ideas from organizational economics.

Suggested Citation

  • Kirsten Foss & Nicolai J. Foss, 2003. "Authority in the Context of Distributed Knowledge," DRUID Working Papers 03-08, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:03-08
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    References listed on IDEAS

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    1. Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-896, September.
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    14. Herbert A. Simon, 1991. "Organizations and Markets," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 25-44, Spring.
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    Citations

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    Cited by:

    1. Fiorenza BELUSSI & Luciano PILOTTI & Silvia Rita SEDITA, 2006. "Learning at the boundaries for industrial districts between exploitation of local resources and the exploration of global knowledge flows," Departmental Working Papers 2006-40, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    2. Markus C. Becker, 2012. "Distributed Knowledge and its Coordination," Chapters,in: Handbook of Knowledge and Economics, chapter 20 Edward Elgar Publishing.
    3. Fiorenza Belussi & Luciano Pilotti & Silvia Rita Sedita, 2006. "Learning at the boundaries for industrial districts between exploitation of local resources and exploration of global knowledge flows," "Marco Fanno" Working Papers 0033, Dipartimento di Scienze Economiche "Marco Fanno".
    4. K. Foss & Nicolai Foss, 2006. "The limits to designed orders: Authority under “distributed knowledge” conditions," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 19(4), pages 261-274, December.

    More about this item

    Keywords

    Distributed knowledge; existence of authority; problem-solving; the boundaries of the firm;

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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