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Organizational politics and complexity: Coase vs. Arrow, March, and Simon

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  • Luigi Marengo

Abstract

This article argues that the transaction cost approach to the problem of organizing economic activities is undermined by a neglect of the consequences of the complexity of the interconnections among such activities and, in particular, of the complexity generated by conflict and divergent interests of the agents involved. With the increase of conflict, organizational equilibria cease to exist. Thus hierarchy is, in principle, not necessarily an efficiency increasing remedy to the existence of transaction costs but can be explained also as a way to provide temporary equilibria in the everlasting organizational conflict.

Suggested Citation

  • Luigi Marengo, 2020. "Organizational politics and complexity: Coase vs. Arrow, March, and Simon," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(1), pages 95-104.
    • Handle: RePEc:oup:indcch:v:29:y:2020:i:1:p:95-104.
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    File URL: http://hdl.handle.net/10.1093/icc/dtz067
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    Citations

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    Cited by:

    1. Mohamed Ali Ben Halima & Nathalie Greenan & Joseph Lanfranchi, 2021. "Organisational changes and long-term sickness absence and injury leave: a difference in difference approach," TEPP Working Paper 2021-05, TEPP.
    2. Nathalie Greenan & Silvia Napolitano, 2021. "Why Do Employees Participate in Innovation? Skills and Organisational Design Issues and the Ongoing Technological Transformation," Working Papers halshs-03270141, HAL.
    3. Grzegorz Drozdowski, 2021. "Economic Calculus Qua an Instrument to Support Sustainable Development under Increasing Risk," JRFM, MDPI, vol. 14(1), pages 1-12, January.
    4. Ben Halima, Mohamed Ali & Greenan, Nathalie & Lanfranchi, Joseph, 2023. "Getting sick for profit? The impact of cumulative ICT and management changes on long term sickness absence," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 659-688.
    5. Zbyslaw Dobrowolski & Grzegorz Drozdowski & Monika Dobrowolska & Janusz Sobon & Dariusz Sobon, 2021. "Economic Calculus and Weak Signals: Prevention Against Foggy Bottom," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 165-174.
    6. Simona Settepanella & Gennaro Amendola & Luigi Marengo & Connor Minto, 2022. "Divide and conquer: the engineering of delegation," Computational Management Science, Springer, vol. 19(4), pages 605-626, October.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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