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Task assignment and organizational form

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  • Kerstin Puschke

Abstract

This paper shows that a firm prefers a process-based task assignment compared to a function based one if the tasks are from functional areas which are neither too complementary nor too substitutable. We consider several projects with contributions from several functional areas. The organization can be structured along processes like product lines (M-form) or along functional areas like marketing or production (U-form). The U-form enables cost savings due to specialization or scale economies. We show that the more effective incentives under the M-form might outweigh these savings if the functions are neither too complementary nor too substitutable.
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Suggested Citation

  • Kerstin Puschke, 2009. "Task assignment and organizational form," Journal of Economics, Springer, vol. 96(2), pages 149-168, March.
    • Handle: RePEc:kap:jeczfn:v:96:y:2009:i:2:p:149-168
    DOI: 10.1007/s00712-008-0033-z
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    Cited by:

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    3. Schöttner, Anja & Rohlfing-Bastian, Anna, 2015. "Optimal Allocation of Decision-Making Authority and the Provision of Incentives under Uncertainty," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113200, Verein für Socialpolitik / German Economic Association.
    4. Te Bao & Yongqin Wang, 2012. "Incomplete contract, bargaining and optimal divisional structure," Journal of Economics, Springer, vol. 107(1), pages 81-96, September.

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    More about this item

    Keywords

    Task assignment; Organizational form; Incomplete contracts; D02; L23;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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