Interdependence & Organization Design

HANDBOOK OF ECONOMIC ORGANIZATION, A. Grandori, ed., Edward Elgar, 2012

19 Pages Posted: 7 Jan 2012

Date Written: January 2, 2012


If organizations are multi-agent systems with goals, there must exist a mapping from organizational level goals to agent level tasks (March and Simon, 1958). Such a mapping, at least when explicitly recognized (even if not intentionally crafted) is what we think of typically as division of labor. Because the results of the efforts so divided must be integrated back, the division of labor results in interdependence between the agents performing the tasks contributing to the overall goal of the organization. Many perspectives in organization theory build on the premise that organizations “solve” the problems of cooperation and coordination that arise when integrating the efforts of interdependent actors – albeit with varying degrees of success. We have two objectives for our essay. First, we consider the conditions under which interdependence between agents gives rise to cooperation problems vs. coordination problems. Second, we consider some ways in which the cooperation and coordination problems arising from interdependence can be analyzed jointly, rather than separately as traditionally has been the case. We offer some thoughts on how to bridge the gap between how interdependence is treated in these two conceptualizations of organizations- as systems for obtaining cooperation as opposed to systems of coordinated action.

Keywords: interdependence, organisation design, coordination, cooperation

Suggested Citation

Puranam, Phanish and Raveendran, Marlo, Interdependence & Organization Design (January 2, 2012). HANDBOOK OF ECONOMIC ORGANIZATION, A. Grandori, ed., Edward Elgar, 2012, Available at SSRN:

Phanish Puranam

INSEAD ( email )

1 Ayer Rajah Avenue
Singapore, 138676


Marlo Raveendran (Contact Author)

University of California, Riverside ( email )

United States

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