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Coordinating Tasks in M-Form and U-Form Organisations

  • Yingyi Qian
  • Gerard Roland
  • Chenggang Xu

We model the coordination of specialised tasks inside an organisation as "attribute matching". Using this method, we compare the performance of organisational forms (M-form and U-form) in implementing changes such as innovation and reform. In our framework, organisational forms affect the information structure of an organisation and thus the way to coordinate changes. Compared to the U-form, the M-form organisation achieves better coordination but suffers from fewer economies of scale. The distinctive advantage of the M-form is flexibility of experimentation, which allows the organisation to introduce more innovation and reform. The theory is illustrated by the organisational differences between China and the former Soviet Union and sheds light on their different reform strategies, particularly with regard to the prevalence of the experimental approach in China.

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Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Theoretical Economics Paper Series with number 458.

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Date of creation: Jun 2003
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Handle: RePEc:cep:stitep:458
Contact details of provider: Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp

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  1. Maskin, Eric & Qian, Yingyi & Xu, Chenggang, 2000. "Incentives, Information, and Organizational Form," Review of Economic Studies, Wiley Blackwell, vol. 67(2), pages 359-78, April.
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  9. Gary S. Becker & Kevin M. Murphy, 1994. "The Division of Labor, Coordination Costs, and Knowledge," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 299-322 National Bureau of Economic Research, Inc.
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