Consistency in Organization

Schlicht, Ekkehart (20. October 2008): Consistency in Organization. Discussion Papers in Economics 2008-20

Abstract

Internal organization relies heavily on psychological consistency requirements. This perspective has been emphasized in modern compensation theory, but has not been extended to organization theory. The idea is developed by starting from Williamson's discussion of idiosyncratic exchange. The perspective sheds new light on several topics in the theory of the firm, like the boundaries of the firm (“Williamson's puzzle”), the importance of fairness concerns within firms, the attenuation of incentives, or the role of routines. It implies a “perceptional” theory of the firm that is “realistic” in the sense advocated by Coase (1937).

• Item Type: Paper
• Form of publication: Submitted Version
• Keywords: theory of the firm, hierarchy, evolutionary theory of the firm, perceptional theory of the firm, consistency, small numbers, centralization paradox, Williamson's puzzle, compensation, boundaries of the firm, fairness, small numbers, idiosyncratic exchange, entitlements, obligations, routines, framing
• Faculties: Economics; Economics > Munich Discussion Papers in Economics; Economics > Munich Discussion Papers in Economics > Micro-Economics; Economics > Munich Discussion Papers in Economics > Behavioral Economics; Economics > Munich Discussion Papers in Economics > Institutional Economics; Economics > Chairs > Chair of Institutional Economics (closed)
• Subjects: 300 Social sciences > 300 Social sciences, sociology and anthropology; 300 Social sciences > 330 Economics
• JEL Classification: B52, D02, L2
• Language: English