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Consistency in Organization (updated)

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  • Schlicht, Ekkehart

    (University of Munich)

Abstract

Internal organization relies heavily on psychological consistency requirements. This thought has been emphasized in modern compensation theory, but has not been extended to organization theory. The perspective sheds new light on several topics in the theory of the firm, like the boundaries of the firm, the importance of fairness concerns within firms, the attenuation of incentives, or the role of routines and incentives. It implies a perceptional theory of the firm that is realistic in the sense advocated by Ronald Coase (1937).

Suggested Citation

  • Schlicht, Ekkehart, 2011. "Consistency in Organization (updated)," IZA Discussion Papers 5644, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5644
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    More about this item

    Keywords

    disruptive technologies; skunkworks; ownership effect; fairness; employment relationship; Simon; theory of the firm; hierarchy; evolutionary theory of the firm; perceptional theory of the firm; consistency; small numbers; Williamson’s puzzle; centralization paradox; compensation; boundaries of the firm; fairness; idiosyncratic exchange; entitlements; obligations; routines; framing; Tayloristic organization; holistic organization;
    All these keywords.

    JEL classification:

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

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