Generalizing incentives and loss of control in an optimal hierarchy: the role of information technology

Kieron J. Meagher*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

18 Citations (Scopus)

Abstract

How do changes in information technology affect a firm's organization? To answer this question I extend the existing literature on incentives and control in hierarchies to include: (i) a varying management technology; and (ii) endogenous hierarchy size. The generalization produces the new prediction that improvements in information technology produce larger hierarchies. This prediction is confirmed by published historical analysis of the emergence of the modern corporation.

Original languageEnglish
Pages (from-to)273-280
Number of pages8
JournalEconomics Letters
Volume78
Issue number2
DOIs
Publication statusPublished - Feb 2003
Externally publishedYes

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