Rational Inattention and Organizational Focus

Wouter Dessein (), Tano Santos and ,
Authors registered in the RePEc Author Service: Andrea Galeotti

No 9395, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We examine the allocation of scarce attention in team production. Each team member is in charge of a specialized task, which must be adapted to a privately observed shock and coordinated with other tasks. Coordination requires that agents pay attention to each other, but attention is in limited supply. We show that when attention is scarce, organizational focus and leadership naturally arise as a response to organizational trade-offs between coordination and adaptation. At the optimum, all attention is evenly allocated to a select number of "leaders." The organization then excels in a small number of focal tasks at the expense of all others. Our results shed light on the importance of leadership, strategy and ?core competences,? as well as new trends in organization design. We also derive implications for the optimal size or ?scope? of organizations. Surprisingly, improvements in communication technology may result in smaller but more adaptive organizations.

Keywords: Attention; Coordination; Core competencies; Leadership; Organization size; Organizational design; Organizational strategy (search for similar items in EconPapers)
JEL-codes: D2 D83 D85 L2 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-cdm, nep-hrm and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://cepr.org/publications/DP9395 (application/pdf)

Related works:
Journal Article: Rational Inattention and Organizational Focus (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:9395

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP9395

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().