The Demand for Coordination

Wouter Dessein () and Tano Santos

No 10056, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper endogenizes coordination problems in organizations by allowing for both ex ante coordination of activities, using rules and task guidelines, and ex post coordination, using communication and broad job assignments. It shows that: (i) Task specialization and the division of labor is mainly limited by employee discretion, rather than by the importance of coordination. In particular, specialization is often non-monotonic in the importance of coordination. (ii) Organizations exhibit increasing returns to ex post coordination. This rationalizes discrete `shifts' in organizational design from very rigid and specialized task assignments, to very flexible organizations characterized by extensive task bundling, intensive horizontal communication and substantial employee discretion. (iii) Broad task assignments and intensive horizontal communication are complementary. Hence, lower communication costs often result in less specialization.

JEL-codes: D2 D8 (search for similar items in EconPapers)
Date: 2003-11
Note: LS
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Citations: View citations in EconPapers (9)

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Working Paper: The Demand for Coordination (2003)
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