Working Paper: CEPR ID: DP4096
Authors: Wouter Dessein; Tano Santos
Abstract: This paper endogenizes coordination problems in organizations by allowing for both ex ante coordination of activities, using rules and task guidelines, and ex post coordination, using communication and broad job assignments. It shows that: (i) Task specialization and the division of labour is mainly limited by employee discretion, rather than by the importance of coordination. In particular, specialization is often non-monotonic in the importance of coordination. (ii) Organizations exhibit increasing returns to ex post coordination. This rationalizes discrete ?shifts? in organizational design from very rigid and specialized task assignments, to very flexible organizations characterized by extensive task-bundling, intensive horizontal communication and substantial employee discretion. (iii) Broad task assignments and intensive horizontal communication are complementary. Hence, lower communication costs often result in less specialization.
Keywords: authority; communication; coordination; information technology; organizations; skills; specialization
JEL Codes: D2; D8; J2; L2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| task specialization (L23) | coordination needs (P11) |
| task interdependence (L23) | coordination needs (P11) |
| coordination (P11) | efficiencies (D61) |
| efficiencies (D61) | employee discretion (M52) |
| coordination (P11) | adaptability (L15) |
| broad task assignments (M54) | intensive horizontal communication (L22) |
| intensive horizontal communication (L22) | broad task assignments (M54) |