Language and the Theory of the Firm
Luis Garicano () and
The Quarterly Journal of Economics, 2007, vol. 122, issue 1, 373-407
We characterize efficient technical languages and study their interaction with the scope and structure of organizations. Efficient languages use precise words for frequent events and vague words for unusual ones. A broader organizational scope allows for more synergies to be captured, but reduces within-unit efficiency, since it requires a more generic language. A manager working as specialized translator may also be used to achieve between-unit coordination while maintaining separate languages. Our theory reconciles two recent well-documented phenomena within organizations: the recent increase in information centralization and the reduction in hierarchical centralization.
References: Add references at CitEc
Citations View citations in EconPapers (69) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: Language and the Theory of the Firm (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:oup:qjecon:v:122:y:2007:i:1:p:373-407.
Access Statistics for this article
The Quarterly Journal of Economics is currently edited by Robert J. Barro, Elhanan Helpman, Lawrence F. Katz and Andrei Schleifer
More articles in The Quarterly Journal of Economics from Oxford University Press
Series data maintained by Oxford University Press ().