Organizational Design with Portable Skills

Luca Picariello

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Workers learn from the tasks they perform, and in the process, they ac-cumulate human capital that is potentially portable. Companies that cannot commit to specific task allocations may assign employees to tasks that reduce retention costs and do not maximize productivity. Equity partnerships may achieve efficient task allocation by distributing control and profit among partners, thus improving productivity. This analysis provides a novel rationale for the widespread presence of partnerships in professional service industries, their shift toward performance-based remuneration, and the conditions under which partnerships are more efficient than corporations with frictions like wealth constraints, risk aversion, and asymmetric information.

Keywords: Task Allocation; Retention; Control Rights; Partnerships. (search for similar items in EconPapers)
JEL-codes: D20 D86 J44 J54 L20 M50 (search for similar items in EconPapers)
Date: 2019-10-22, Revised 2025-01-03
New Economics Papers: this item is included in nep-bec, nep-cta, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Organizational Design with Portable Skills (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:546

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