Download e-book for iPad: Efficient Organizational Design: Balancing Incentives and by Marco Weiss (auth.)

By Marco Weiss (auth.)

ISBN-10: 0230287956

ISBN-13: 9780230287952

ISBN-10: 1349353922

ISBN-13: 9781349353927

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Additional resources for Efficient Organizational Design: Balancing Incentives and Power

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By taking into account insights from the literature on strategic management, Austrian economics, sociology and evolutionary biology, this branch of viewing the firm is more process-orientated. 37 Foundations of Organizational Design 33 The knowledge-based theory of the firm, while often criticizing the assumptions made in mainstream organizational economics, is not without its own critics. Williamson (1999), for example, denounces the weaknesses in the competence perspective that arise from the lack of formalization and from the bias that is caused by finding only ‘ex post rationalizations for success’38 rather than giving some predictive guidelines.

After a relatively short period of training, all workers were able to perform the tasks that had previously been reserved for those who had progressed from apprentice to master. Human capital was destroyed, and the new processes did not require as much of it as before. A different set of skills was now needed: the ability to manage and to organize on this vastly increased scale that these huge factories brought with them. With the possibility of replacing workers almost at will, power was shifted from workers to capitalists in the organization of economic activity.

15 Human capital is inalienable from its owner, the human being behind it. Other remedies are needed: hybrids such as franchising might be better organizational designs in this case when investments in both physical and human capital are important. In the course of this book, other solutions will be explored that rest on more parameters than only the boundary decision. The structure of firms – agency theory As mentioned above, one reason for the existence of firms can be team production. As outlined above, Alchian and Demsetz (1972) argue that the firm is distinct from a market solution because of the nature of production.

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Efficient Organizational Design: Balancing Incentives and Power by Marco Weiss (auth.)


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