Organization Structure, Contract Design and Government Ownership: A Clinical Analysis of German Privatization

Harvard Business School Working Paper No. 97-007

45 Pages Posted: 17 Feb 1998

See all articles by I. J. Alexander Dyck

I. J. Alexander Dyck

University of Toronto - Rotman School of Management

Karen H. Wruck

Ohio State University - Fisher College of Business, Department of Finance

Date Written: January 22, 1998

Abstract

This paper examines the role that organization structure and contract design played in resolving economic and political problems that arose during Germany's privatization process. We find that German officials structured organizations and contracts in a way that made credible the government's commitment to rapid privatization. This credibility served to protect the process from political and social opposition. In addition, it enabled Germany to attract talented private sector managers to its privatization effort. This began with the establishment of an independent privatization agency, the Treuhand. It culminated with the creation of another set of independent organizations called Management KGs, to which the Treuhand outsourced part of its restructuring, management and privatization work.

JEL Classification: G32, G38, L22, P52

Suggested Citation

Dyck, I.J. Alexander and Wruck, Karen H., Organization Structure, Contract Design and Government Ownership: A Clinical Analysis of German Privatization (January 22, 1998). Harvard Business School Working Paper No. 97-007. Available at SSRN: https://ssrn.com/abstract=60059 or http://dx.doi.org/10.2139/ssrn.60059

I.J. Alexander Dyck

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S 3E6
Canada
416-946-0819 (Phone)

Karen H. Wruck (Contact Author)

Ohio State University - Fisher College of Business, Department of Finance ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States
614-292-4330 (Phone)
614-292-2418 (Fax)

HOME PAGE: http://https://fisher.osu.edu/people/wruck.1

Register to save articles to
your library

Register

Paper statistics

Downloads
910
rank
23,179
Abstract Views
5,321
PlumX Metrics