Strategic Reorganizations in Stable Environments
نویسندگان
چکیده
A key challenge in the literature has been to provide an explanation for the fact that observed reorganizations seem to be substantially more drastic and numerous than implied by changes in environmental conditions. This paper offers an explanation based on the observation that contracts are necessarily incomplete, and therefore there exists a multitude of everyday circumstances in which opportunistic behavior, such as collusion and rent seeking, can and does take place in organizations. Therefore, a dynamic organizational structure, with periodic reorganizations, can reduce the incentives for collusion and rent seeking activities and improve the performance of an organization, even if environmental conditions are stable.
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