Organizational Design with Portable Skills

Luca Picariello

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Workers can move across firms and carry along portable human capital. I present a model where workers' talent is observable but task allocation is non-contractible. To reduce mobility firms may inefficiently match workers with tasks that reduce their outside option. I show that by organizing the firm as an equity-partnership, the efficient task allocation can be implemented and profits increase. This result is attained by shifting control rights to workers who become partners, decide over task allocation and earn dividends as compensation. This provides a new rationale for the widespread presence of firms organized as partnerships in human-capital intensive industries.

Keywords: Task Allocation; Retention; Control Rights; Partnerships. (search for similar items in EconPapers)
JEL-codes: D86 J24 J54 M52 (search for similar items in EconPapers)
Date: 2019-10-22
New Economics Papers: this item is included in nep-bec, nep-cta, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Organizational Design with Portable Skills (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:546

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