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Information and the Division of Labour: Implications for the Firm's Choice of Organisation

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  • Carter, Martin J

Abstract

This paper provides a partial analysis of the organizational problem that arises from decentralized information within the firm. Firm members possessing different decision-relevant information can communicate in different ways, leading to a taxonomy of organizational structures with different effectiveness and costs. It is shown that, with usual assumptions about the form of the payoff function and the stochastic nature of information, the decision functions and the expected profit for different organizations have a simple linear form, comprising a small number of information value parameters. Copyright 1995 by Royal Economic Society.

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  • Carter, Martin J, 1995. "Information and the Division of Labour: Implications for the Firm's Choice of Organisation," Economic Journal, Royal Economic Society, vol. 105(429), pages 385-397, March.
    • Handle: RePEc:ecj:econjl:v:105:y:1995:i:429:p:385-97
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    Cited by:

    1. Buckley, Peter J. & Carter, Martin J., 2002. "Process and structure in knowledge management practices of British and US multinational enterprises," Journal of International Management, Elsevier, vol. 8(1), pages 29-48.
    2. Wojan, Timothy R., 1998. "Rural Employment Growth In The 'New Economy': A Test Of The Spatial Division Of Labor Hypothesis," 1998 Annual meeting, August 2-5, Salt Lake City, UT 21023, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Kato, Takao & Owan, Hideo, 2011. "Market characteristics, intra-firm coordination, and the choice of human resource management systems: Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 375-396.
    4. Nigel Wadeson, 1999. "Two-way Communication Costs and the Boundaries of the Firm," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(3), pages 301-329.
    5. Heywood, John S. & Jirjahn, Uwe & Wei, Xiangdong, 2008. "Teamwork, monitoring and absence," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 676-690, December.

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