Abstract

http://ssrn.com/abstract=162129
 
 

Citations



 


 



Informal Authority in Organizations


George P. Baker


HBS Negotiations, Organizations and Markets Unit; National Bureau of Economic Research (NBER)

Robert S. Gibbons


Massachusetts Institute of Technology - Sloan School and Department of Economics; National Bureau of Economic Research (NBER)

Kevin J. Murphy


University of Southern California - Marshall School of Business; University of Southern California - Department of Economics; USC Gould School of Law


Journal of Law, Economics and Organization, Vol. 15, No. 1, Spring 1999

Abstract:     
We assert that decision rights in organizations are not contractible: the boss can always overturn a subordinate's decision, so formal authority resides only at the top. Although decision rights cannot be formally delegated, they might be informally delegated through self-enforcing relational contracts. We examine the feasibility of informal authority in two informational environments. We show that different information structures produce different decisions not only because different information is brought to bear in the decision-making process, but also because different information creates different temptations to renege on relational contracts. In addition, we explore the implications of formal delegation achieved through divestitures.

JEL Classification: J54, D21, D23, L22

Accepted Paper Series


Not Available For Download

Date posted: May 17, 1999  

Suggested Citation

Baker, George P. and Gibbons, Robert S. and Murphy, Kevin J., Informal Authority in Organizations. Journal of Law, Economics and Organization, Vol. 15, No. 1, Spring 1999. Available at SSRN: http://ssrn.com/abstract=162129

Contact Information

George P. Baker (Contact Author)
HBS Negotiations, Organizations and Markets Unit ( email )
Soldiers Field
Boston, MA 02163
United States
617-495-6119 (Phone)
617-496-4191 (Fax)
HOME PAGE: http://www.people.hbs.edu/gbaker/index.html
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Robert S. Gibbons
Massachusetts Institute of Technology - Sloan School and Department of Economics ( email )
E52-432
MIT
Cambridge, MA 02142
United States
617-253-0283 (Phone)
617-258-6855 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Kevin J. Murphy
University of Southern California - Marshall School of Business ( email )
BRI 308, MC 0804
Los Angeles, CA 90089-0804
United States
213-740-6553 (Phone)
213-740-6650 (Fax)

University of Southern California - Department of Economics
3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States
USC Gould School of Law
699 Exposition Boulevard
Los Angeles, CA 90089
United States

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