Research Repository

A multi-task principal-agent approach to organizational form

Besankoj, D and Régibeau, P and Rockett, KE (2005) 'A multi-task principal-agent approach to organizational form.' Journal of Industrial Economics, 53 (4). 437 - 467. ISSN 0022-1821

Full text not available from this repository.

Abstract

This paper studies the choice of organizational forms in a multi-task principal-agent model. We compare a functional organization in which the firm is organized into functional departments such as marketing and R&D to a product-based organization in which the firm is organized into product lines. Managers' compensation can be based on noisy measures of product-line profits. Measures of a functional area's contribution to total profits are not available, however. This effect favors the product organization. However, if there are significant asymmetries between functional area contributions to organizational success and cross-product externalities within functions, organizing along functional lines may dominate the product organization. The functional organization can also dominate when a function is characterized by strong externalities while the other is not. © Blackwell Publishing Ltd. 2005.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 12 Jul 2012 11:51
Last Modified: 30 Jan 2019 16:15
URI: http://repository.essex.ac.uk/id/eprint/2841

Actions (login required)

View Item View Item