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Coordination and delay in hierarchies
Author(s) -
Patacconi Andrea
Publication year - 2009
Publication title -
the rand journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.687
H-Index - 108
eISSN - 1756-2171
pISSN - 0741-6261
DOI - 10.1111/j.1756-2171.2008.00061.x
Subject(s) - hierarchy , decentralization , key (lock) , control (management) , simple (philosophy) , computer science , span (engineering) , industrial organization , microeconomics , business , economics , market economy , computer security , engineering , artificial intelligence , epistemology , philosophy , civil engineering
This article studies hierarchical organizations where concerns for fast execution are important and employees must be coordinated to avoid wasteful duplications of effort. Simple conditions are provided for the time spent on coordinating subordinates to be increasing and the span of control to be decreasing as one goes up the hierarchy, with equalities holding if delay is all that matters. When returns to specialization are substantial, the span of control also tends to widen and the hierarchy to flatten as urgency increases. The model suggests that concerns for fast execution may be key in explaining recent trends toward decentralization and delayering in firms.