Cover: Inside the Firm: The Inefficiencies of Hierarchy, from Harvard University PressCover: Inside the Firm in E-DITION

Inside the Firm

The Inefficiencies of Hierarchy

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$65.00 • £54.95 • €60.00

ISBN 9780674420809

Publication Date: 11/30/1987

276 pages



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  • Preface
  • 1. Organization and the Procedural Perspective
    • The Procedural Perspective
    • The Connections of the Various Components of the Book
  • 2. Decision Occurrences
    • The Inner Preference Set
    • Decision Procedures
    • Approximate Maximizing Procedures
    • Are Noncalculating Procedures Optimal?
    • The Yerkes-Dodson Law and Decision Procedures
    • The Emotion Spillover Theory of Decision Making
    • Inert Areas and Procedural Decisions
    • The Employment Contract and Commitment Decisions
    • Summary and Conclusions
  • 3. On the Anatomy of Decisions
    • Decision Triggers and Finalizatrons
    • Options, Selection Rules, and Search Processes
    • Notes on Procedures and Procedure Sets
    • Conclusions
  • 4. Economics of Inertia
    • Modeling Inertial Frames
    • Some Consequences of Inertia
  • 5. Productivity: The Hidden Prisoner’s Dilemma Analysis
    • Self-Interest and Trust: The Prisoner’s Dilemma Example
    • The Productivity Problem in the Prisoner’s Dilemma Framework
    • Peer Group and Golden-Rule Standards
    • The Twofold Prisoner’s Dilemma Problem
    • Summary and Conclusions
  • 6. Conventions, Coordination, and Decisions
    • The Theory of Conventions
    • Conventions as a Formalism
    • Does a Convention Have to Be Optimal?
    • Summary and Conclusions
  • 7. Conventions as a Solution to the Intrafirm Prisoner’s Dilemma Problem
    • The Effort Convention
    • Working Conditions and Wages
    • Wages: Convention or Negotiation?
    • On the Stability of Conventions
    • Summary and Conclusions
  • 8. Intrafirm Effort Decisions: Monitoring and Sanctions
    • The Voluntarily Motivated Effort Hypothesis
    • Hierarchical Sanctions
    • Peer Sanctions and Sanction Levels
    • Sanctions and Nonmaximizing Behavior
    • Concluding Remarks
  • 9. Equilibrium, Entrepreneurship, and Inertia
    • Equilibrium and Quasi-Equilibrium
    • What Do Entrepreneurs Do?
    • The Supply of Entrepreneurs and n Achievement Theory
    • Behavior of Firms under Loose Equilibrium
    • Summary and Conclusions
  • 10. An Implications Sampler
    • Summary of Basic Postulates
    • Effort Convention Implications
    • Firm-Level Implications
  • 11. The Power of Hierarchy
    • The Power and Size of Hierarchy
    • The Israeli Kibbutz: Size and Hierarchy
    • The Hierarchical Solution to the Size Problem
  • 12. Specialization, Hierarchy, and Internal Inefficiency
    • Specialization, Effort, and Motivation
    • Process Cuts, Specialization, and Recombinings
    • Related Invisible “Cutouts”
    • Hierarchical Levels, Distance, and Separations
    • Controls, Incentives, and Motivations under Hierarchies
    • Motivational Interdependencies and Hierarchy
    • Vertical Groups
    • The Commitment Network
    • Internal Entrepreneurship and the Commitment Network
    • Factionalism
    • Autonomous Internal Organizations
    • Summary
  • 13. On Japanese Ethos, Culture, and Management
    • Borrowing
    • More on Confucianism
    • The Social Anthropology Approach
    • The Theory of Amae
    • Summary
  • 14. Japanese and Western Management Systems: The Contrasts
    • The Career Elements of the JMS
    • Lifetime Employment Ideal
    • Jobs, Training, and Unions
    • The Japanese Payment and Bonus System
    • Community, Authority, and Consensus
    • The Industrial Group
    • Summary and Conclusions
  • 15. Putting It All Together
    • The Basic Model
    • Pressure, Hierarchy, and Effort
    • A Diagrammatic Treatment of the Model
    • Sources of Inefficiency
    • Efficiency Wages
    • Some Concluding Remarks
  • Appendix. Language, Choice, and Nonoptimization
    • Comparative Language Problems
    • Ex Ante versus Ex Post Arguments
    • The Revealed Preference Case
    • On Objective Function Misspecifications
    • Are Nonoptimal Choices Always Translatable?
    • The Disutility of Maximization
    • Inertia, Inert Areas, and Utility
    • Decision Making: Individuals versus Groups
    • Language and the Concept of Technical Inefficiency
    • Summary
  • References
  • Index

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