Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5644
Internal organization relies heavily on psychological consistency requirements. This thought has been emphasized in modern compensation theory, but has not been extended to organization theory. The perspective sheds new light on several topics in the theory of the firm, like the boundaries of the firm, the importance of fairness concerns within firms, the attenuation of incentives, or the role of routines and incentives. It implies a perceptional theory of the firm that is realistic in the sense advocated by Ronald Coase (1937).
theory of the firm hierarchy evolutionary theory of the firm perceptional theory of the firm consistency small numbers centralization paradox Williamson's puzzle compensation boundaries of the firm fairness idiosyncratic exchange entitlements obligations routines framing Simon employment relationship fairness ownership effect skunkworks disruptive technologies Tayloristic organization holistic organization