The Demand for Coordination

54 Pages Posted: 4 Nov 2003 Last revised: 25 Jun 2010

See all articles by Wouter Dessein

Wouter Dessein

University of Chicago - Booth School of Business

Tano Santos

Columbia Business School; National Bureau of Economic Research (NBER)

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Date Written: November 2003

Abstract

This paper endogenizes coordination problems in organizations by allowing for both ex ante coordination of activities, using rules and task guidelines, and ex post coordination, using communication and broad job assignments. It shows that: (i) Task specialization and the division of labor is mainly limited by employee discretion, rather than by the importance of coordination. In particular, specialization is often non-monotonic in the importance of coordination. (ii) Organizations exhibit increasing returns to ex post coordination. This rationalizes discrete `shifts' in organizational design from very rigid and specialized task assignments, to very flexible organizations characterized by extensive task bundling, intensive horizontal communication and substantial employee discretion. (iii) Broad task assignments and intensive horizontal communication are complementary. Hence, lower communication costs often result in less specialization.

Suggested Citation

Dessein, Wouter and Santos, Tano, The Demand for Coordination (November 2003). NBER Working Paper No. w10056. Available at SSRN: https://ssrn.com/abstract=463423

Wouter Dessein

University of Chicago - Booth School of Business ( email )

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Tano Santos (Contact Author)

Columbia Business School ( email )

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