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Task Assignment and Organizational Form

  • Kerstin Puschke


    (Free University of Berlin, Department of Economics)

This paper shows that a firm prefers a process-based task assignment compared to a function based one if the tasks are from functional areas which are neither too complementary nor too substitutable. We consider several projects with contributions from several functional areas. The organization can be structured along processes like product lines (M-form) or along functional areas like marketing or production (U-form). The U-form enables cost savings due to specialization or scale economies. We show that the more effective incentives under the M-form might outweigh these savings if the functions are neither too complementary nor too substitutable.

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Paper provided by Departmental Working Papers in its series Papers with number 033.

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Handle: RePEc:bef:lsbest:033
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  8. Yingyi Qian & Gerard Roland & Chenggang Xu, 2006. "Coordination and Experimentation in M-Form and U-Form Organizations," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 366-402, April.
  9. Aghion, Philippe & Tirole, Jean, 1995. "Some implications of growth for organizational form and ownership structure," European Economic Review, Elsevier, vol. 39(3-4), pages 440-455, April.
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