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Disobedience and Authority

Author

Listed:
  • Marino, Anthony M.
  • Matsusaka, John G.
  • Zabojnik, Jan

Abstract

This paper presents a theory of the allocation of authority in an organization in which centralization is limited by the agent’s ability to disobey the principal. We show that workers are given more authority when they are costly to replace or do not mind looking for another job, even if they have no better information than the principal. The allocation of authority thus depends on external market conditions as well as the information and agency problems emphasized in the literature. Evidence from a national survey of organizations shows that worker autonomy is related to separation costs as the theory predicts.

Suggested Citation

  • Marino, Anthony M. & Matsusaka, John G. & Zabojnik, Jan, 2006. "Disobedience and Authority," Queen's Economics Department Working Papers 273585, Queen's University - Department of Economics.
    • Handle: RePEc:ags:quedwp:273585
    DOI: 10.22004/ag.econ.273585
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    Cited by:

    1. is not listed on IDEAS
    2. Hideshi ITOH, 2015. "Organizing for Change: Preference diversity, effort incentives, and separation of decision and execution," Discussion papers 15082, Research Institute of Economy, Trade and Industry (RIETI).
    3. Emre Ekinci & Nikos Theodoropoulos, 2018. "Informal Delegation and Training," University of Cyprus Working Papers in Economics 02-2018, University of Cyprus Department of Economics.
    4. Dessein, Wouter, 2012. "Incomplete Contracts and Firm Boundaries: New Directions," CEPR Discussion Papers 9019, C.E.P.R. Discussion Papers.
    5. Kräkel, Matthias & Müller, Daniel, 2015. "Merger efficiency and managerial incentives," International Journal of Industrial Organization, Elsevier, vol. 41(C), pages 51-63.
    6. Van den Steen, Eric, 2007. "The Limits of Authority: Motivation versus Coordination," Working papers 37305, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    7. Junichiro Ishida, 2015. "Hierarchies Versus Committees: Communication and Information Acquisition in Organizations," The Japanese Economic Review, Japanese Economic Association, vol. 66(1), pages 62-88, March.
    8. Robert Gibbons, 2010. "Inside Organizations: Pricing, Politics, and Path Dependence," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 337-365, September.

    More about this item

    Keywords

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    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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