The Firm as a Communication Network

Bolton, Patrick; Dewatripont, Mathias

doi:10.2307/2118349

Cited by 611 publications

(361 citation statements)

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“…More closely related to the approach of this paper is the work by Bolton and Dewatripont (1994). They build on the insight, present already in Becker and Murphy (1993), that there exists a trade-off between specialization and coordination or communication costs.…”

Section: Introductionmentioning

confidence: 83%

“…I make two assumptions about this cost. First, following the convention used previously in the information processing literature (Radner 1993;Bolton and Dewatripont 1994), I aggregate all the communication losses in the "receiver," in this case the worker who is being asked. Second, communication costs are incurred even when the worker asked does not know the answer, since she must figure out if she knows the answer and communicate with the worker who asked.…”

Section: B Communication and Organizationmentioning

confidence: 99%

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Hierarchies and the Organization of Knowledge in Production

Garicano

2000

Journal of Political Economy

798

179

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This paper studies how communication allows for the specialized acquisition of knowledge. It shows that a knowledge-based hierarchy is a natural way to organize the acquisition of knowledge when matching problems with those who know how to solve them is costly. In such an organization, production workers acquire knowledge about the most common or easiest problems confronted, and specialized problem solvers deal with the more exceptional or harder problems. The paper shows that the model is consistent with stylized facts in the theory of organizations and uses it to analyze the impact of changes in production and information technology on organizational design.

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Section: Introductionmentioning

confidence: 83%

Section: B Communication and Organizationmentioning

confidence: 99%

Hierarchies and the Organization of Knowledge in Production

Garicano

2000

Journal of Political Economy

798

179

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“…Our work is also related to the complete contract literature on divisional structure, which can largely be subdivided into two categories: the communication models (Argyres 1995;Bolton and Dewatripont 1994;Dessein 2002;Dessein and Santos 2006;van Zandt 1999), which mainly concern the tradeoffs between coordination (or communication cost) and specialization (or local adaptation), and the incentive models (Maskin et al 2000;Poitevin 1995;Rotemberg and Saloner 1993), which address the incentive schemes for division managers. For a more detailed discussion of this literature, Mookherjee (2006) provides an excellent survey.…”

Section: Related Literaturementioning

confidence: 99%

Incomplete contract, bargaining and optimal divisional structure

Bao

Wang

2011

J. Econ.

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When complete contracting is not possible, allocating control structure becomes the second-best arrangement. This paper analyzes the design of optimal divisional structure within an organization where ex post bargaining between the potential divisional managers is possible. In much the same light as Aghion and Tirole (J Political Econ 105(1):1-29, 1997), we study the control problem in the context of search for projects. Our model shows that when the managers cannot bargain with one another, internal integration is preferred to internal separation. Where bargaining is possible, formal divisional structure defines both the ex post bargaining position of the two managers and their incentive to search ex ante. When the managers tend to arrive at a more favorable project to the principal via bargaining, the general leader of a firm may want to choose separation instead to increase the probability of bargaining, as the symmetrical incentive requires both managers to search and get informed.

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“…Much of the recent literature on the organization of work within firms (e.g. Becker and Murphy (1992), Bolton and Dewatripont (1994), and Yang and Borland (1991)) concentrates on the returns to specialization vis-à-vis the costs of coordinating the activities of different workers. In this context, falling costs of communication (due to improvements in information technologies) lead to greater specialization among employees within firms, not more multi-tasking.…”

Section: Introductionmentioning

confidence: 99%

Multitask Learning and the Reorganization of Work: From Tayloristic to Holistic Organization

Lindbeck

Snower

2000

Journal of Labor Economics

325

241

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Multi-Task Learning and the Reorganization of Work. From Tayloristic to Holistic OrganizationAssar Lindbeck Dennis J. Snower The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent, nonprofit limited liability company (Gesellschaft mit beschränkter Haftung) supported by the Deutsche Post AG. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. The current research program deals with (1) mobility and flexibility of labor markets, (2) internationalization of labor markets and European integration, (3) the welfare state and labor markets, (4) labor markets in transition, (5) the future of work, and (6) general labor economics. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. The paper analyzes the contemporary organizational restructuring of production and work within firms. We emphasize the shift from a "Tayloristic" organization of work (characterized by significant specialization by tasks) to a "holistic" organization (featuring job rotation, integration of tasks and learning across tasks). We examine four driving forces behind this restructuring process: advances in production technologies promoting technological task complementarities, advances in information technologies promoting informational task complementarities, changes in worker preferences in favor of versatile work, and advances in human capital that make workers more versatile. Our analysis can also help explain the recent widening of wage differentials and disparities in job opportunities, not only between groups with similar characteristics, but also within these groups.JEL Classification: J23, J24, L23, M12, O33.

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The Firm as a Communication Network

Cited by 611 publications

References 0 publications

Hierarchies and the Organization of Knowledge in Production

Hierarchies and the Organization of Knowledge in Production

Incomplete contract, bargaining and optimal divisional structure

Multitask Learning and the Reorganization of Work: From Tayloristic to Holistic Organization

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