Authority inside the firm: multiple mechanisms of coordination

Bernard Baudry () and Bruno Tinel ()
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Bernard Baudry: CALW - Centre Auguste et Léon Walras - UL2 - Université Lumière - Lyon 2 - CNRS - Centre National de la Recherche Scientifique
Bruno Tinel: MATISSE - UMR 8595 - Modélisation Appliquée, Trajectoires Institutionnelles et Stratégies Socio-Économiques - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: In the last twenty years, through a growing awareness of contractual incompleteness, the concept of authority has regained primacy in the analysis of the employment relationship. This article pursues two goals. First, we assess the famous controversy between Coase and Alchian and Demsetz via an analysis of the foundations of intra-firm authority. Second, we argue that intra-firm authority cannot hinge on a single variable and, to the contrary, rests on multiple mechanisms. The employer's authority over the employee is therefore not binary –infinite or null – and should be understood in terms of degree.

Keywords: authority; firm; incomplete contracts; law and economics (search for similar items in EconPapers)
Date: 2004
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