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The Economics of Business Process Design: Motivation, Information and Coordination within the Firm

In: International Business

Author

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  • Peter J. Buckley
  • Martin J. Carter

Abstract

This chapter presents a transaction cost analysis of the internal business processes of firms. Business processes are collections of activities which are technologically or managerially linked so that they jointly affect value added. Their organisation is characterised by their ‘architecture’ - the allocation of responsibilities amongst individuals and groups and communication between them for information and coordination - and their incentive structure. The overall costs of organisation are determined by losses due to imperfect motivation of process members, which flows from the incentive structure, and imperfect information and coordination, which flow from the architecture, together with the resource costs associated with incentives and architecture. Perfect motivation corresponds to ‘team behaviour’ and a quantitative model, based on team theory, indicates how the best architecture depends on the degree interaction between activities comprising the business process.

Suggested Citation

  • Peter J. Buckley & Martin J. Carter, 1998. "The Economics of Business Process Design: Motivation, Information and Coordination within the Firm," Palgrave Macmillan Books, in: International Business, chapter 8, pages 186-216, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-26416-2_8
    DOI: 10.1007/978-1-349-26416-2_8
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    Cited by:

    1. Patel, Parth & Varma, Arup & Sengupta, Santoshi & Prikshat, Verma & Park, HyunMi, 2022. "The international training of expatriates in Western subsidiaries of emerging multinational enterprises: A knowledge-based perspective," Journal of International Management, Elsevier, vol. 28(1).

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