Knowledge and internal organization

Minkler, Alanson P.

doi:10.1016/0167-2681(93)90037-p

Cited by 58 publications

(22 citation statements)

References 6 publications

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“…Grandori (2002: 257) argues that "[dispersed] knowledge causes authority (as a centralized decision-making system) to fail in all its forms." Similar statements can be found in, for example, Minkler (1993), Cowen and Parker (1997), and Hodgson (1998). These authors explicitly invoke Hayek in support of their arguments.…”

Section: The Application Of Hayek's Argument In Management and Organisupporting

confidence: 52%

“…His fundamental argument that dispersed knowledge represents a constraint on centralized resource allocation has explicitly (Jensen and Meckling, 1992;Minkler, 1993;Foss, 1999;Sautet, 2000) and more implicitly (Nonaka and Takeuchi, 1995;Grant, 1996;Grandori, 1997Grandori, , 2002) been applied to firm organization. Decentralization (in economies) and delegation (in firms) emerge to make efficient use of dispersed knowledge.…”

Section: Introductionmentioning

confidence: 99%

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Hayekian Knowledge Problems in Organizational Theory

Foss

2008

SSRN Journal

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In his seminal 1945 essay Hayek argued that the dispersed nature of much commercially relevant knowledge places strong constraints on the feasibility of centralized allocation and coordination mechanisms, but that there remains a problem of making efficient use of such knowledge (the first Hayekian knowledge problem). He realized that firms, because they make use of authority, are also challenged by dispersed knowledge, and his emphasis on delegation as a response to dispersed knowledge may lead to the prediction that (large) firms shouldn't exist. Yet (large) firms obviously do exist (the second Hayekian knowledge problem). Recently, many management and organizational scholars have echoed Hayek's argument that centralized coordination mechanisms, such as authority, may fail in the presence of dispersed knowledge. We examine these modern arguments and argue that they rest on shaky foundations: dispersed knowledge is a less strong constraint on authority than is often thought. We examine the wider implications of this for knowledge-based arguments in management and organizational theory, and call for more research into the micro-foundations of such arguments.

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Section: The Application Of Hayek's Argument In Management and Organisupporting

confidence: 52%

Section: Introductionmentioning

confidence: 99%

Hayekian Knowledge Problems in Organizational Theory

Foss

2008

SSRN Journal

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“…It is hard to deny to that Hayekian settings pose special problems for the use of monitoring mechanisms and incentive pay (Minkler 1993;Aghion and Tirole 1997;Foss 1999). Minkler (1993: 23) argues that "… if the worker knows more than the entrepreneur, it is pointless for the entrepreneur to monitor the worker," which implies that to the extent that monitoring is a precondition for the exercise of direction, using the authority mechanism also seems to become "pointless."…”

Section: Defining Incentive Systemsmentioning

confidence: 99%

“…Since I later discuss the importance for economic organization of the distinction between physical and knowledge assets, I here only concentrate on the distributed knowledge aspect of Hayekian settings. One way of doing is to focus on "hidden knowledge" (Minkler 1993) in relations between a principal (e.g., the Misesian entrepreneur) and an agent (e.g., a hired manager). That is, it will be assumed that the problem facing a principal is not just that he is uninformed about what state of nature has been revealed or of the realization of the agent's effort (i.e., hidden information), as in the usual agency model (Holmström 1979), but that the agent's knowledge is superior to that of the principal with respect to certain production possibilities (i.e., hidden knowledge).…”

Section: Authority In Hayekian Settingsmentioning

confidence: 99%

Economic Organization in the Knowledge Economy

Foss¹

2005

Strategy, Economic Organization, and the Knowledge Economy

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I critically discuss recent claims about economic organization in the emerging "knowledge economy," specifically that authority relations will tend to disappear (or at least become radically transformed), the boundaries of the firm will blur, and coordination mechanisms will be much more malleable than assumed in organizational economics, resulting in various "new organizational forms." In particular, the price mechanism will be used inside hierarchies to a much greater extent. In order to obtain an analytical focus on the knowledge economy, I assume that it may be approximated by "Hayekian settings" (after Hayek 1945), that is, settings in which knowledge is distributed and where knowledge inputs are relatively more important in production than physical capital inputs. I then argue, drawing on organizational economics as well as Mises' insights in property rights and comparative systems, that the presence of Hayekian settings does not mean that authority will disappear, etc., although economic organization will in fact be affected by the emergence of the knowledge economy. This suggests that Austrian economics has an important contribution to make to the study of economic organization.

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“…Indeed, as Minkler (1993) and are more likely to interact with the market through subcontracting relations (monitored in product by relative prices). 16 I have argued that the key trigger -I will postpone using the word "cause"…”

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confidence: 99%

The Coevolution of Technology and Organization in the Transition to the Factory System

Langlois

1998

SSRN Journal

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This essay is a reinterpretation of the debate over the origins of the factory system. In the end, it argues, the explanation for the rise of the factory system lies in the realm of organization, but not in the qualities of organization envisaged by either the quot;radicalquot; view or the transaction-cost view. Drawing on the recent explanations of Clark and Lazonick, the paper suggests that the explanation lies in the volume effect rather than the division-of-labor effect of increasing extent of the market. The essay closes with some musings on the logic of both efficiency and exploitation in historical explanation.

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Knowledge and internal organization

Cited by 58 publications

References 6 publications

Hayekian Knowledge Problems in Organizational Theory

Hayekian Knowledge Problems in Organizational Theory

Economic Organization in the Knowledge Economy

The Coevolution of Technology and Organization in the Transition to the Factory System

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