Non-Hierarchical Aspects of the Internal Organization of the Enterprise: A Partial Survey in Comparative Perspective

Masahiko Aoki and John McMillan

Chapter 11 in Economics in a Changing World, 1996, pp 239-280 from Palgrave Macmillan

Abstract: Abstract It has become evident that one of the fundamental causes of the failure of socialist economies was the incompatibility of centralized national planning with efficient systems of information transfer and incentives. But will problems associated with the former centrally planned economies be resolved if the monolithic, single-peaked, hierarchy of the national planning apparatus is replaced by multiple hierarchies of management and control which will compete in the product market and whose entry and exit will be controlled by the capital market? If we turn our eyes to market economies we find a variety of forms of internal structure and governance of enterprises as well as differences in the degree and methods of control by the capital market. Why does such a variety exist, and what are its implications for efficiency? Will enterprises of different national, cultural, and historical origins eventually converge to the ideal economists’ model of a hierarchy exploiting economies of specialization, scope, and scale under the discipline of perfectly competitive markets?

Keywords: Corporate Governance; Nash Bargaining Solution; Horizontal Coordination; Relative Performance Evaluation; Corporate Governance Structure (search for similar items in EconPapers)
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-25168-1_11

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DOI: 10.1007/978-1-349-25168-1_11

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