Disobedience and Authority
نویسندگان
چکیده
This paper presents a theory of the allocation of authority in an organization in which centralization is limited by the agent’s ability to disobey the principal. We show that workers are given more authority when they are costly to replace or do not mind looking for another job, even if they have no information advantage over the principal. The allocation of authority thus depends on external market conditions as well as the information and agency problems emphasized in the literature. Evidence from a national survey of organizations shows that worker autonomy is related to separation costs as the theory predicts. ∗ Comments appreciated: [email protected], [email protected], [email protected], Marshall School of Business, University of Southern California, Los Angeles, CA 90089-1427. We thank Michael Raith for helpful comments, and Dean Darwin for useful discussions about motivating a sales force. USC MARSHALL SCHOOL OF BUSINESS This is a preliminary draft distributed in advance of the workshop (v2). presented by John Matsusaka FRIDAY, May 19, 2006 12:00 pm – 1:30 pm, Room: HOH-601K USC FBE APPLIED ECONOMICS WORKSHOP
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This paper presents a theory of the allocation of authority in an organization in which centralization is limited by the agent’s ability to disobey the principal. We show that workers are given more authority when they are costly to replace or do not mind looking for another job, even if they have no information advantage over the principal. The allocation of authority thus depends on external ...
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