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The Demand for Coordination

  • Wouter Dessein
  • Tano Santos

This paper endogenizes coordination problems in organizations by allowing for both ex ante coordination of activities, using rules and task guidelines, and ex post coordination, using communication and broad job assignments. It shows that: (i) Task specialization and the division of labor is mainly limited by employee discretion, rather than by the importance of coordination. In particular, specialization is often non-monotonic in the importance of coordination. (ii) Organizations exhibit increasing returns to ex post coordination. This rationalizes discrete `shifts' in organizational design from very rigid and specialized task assignments, to very flexible organizations characterized by extensive task bundling, intensive horizontal communication and substantial employee discretion. (iii) Broad task assignments and intensive horizontal communication are complementary. Hence, lower communication costs often result in less specialization.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10056.

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Date of creation: Nov 2003
Date of revision:
Handle: RePEc:nbr:nberwo:10056
Note: LS
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