This paper investigates the role Regional Headquarters (RHQs) play in large multinationals. It investigates if the establishment of a RHQ creates “hierarchy benefits” to the firm that are in line with eh M-form principles. Based on rich qualitative data that we collected for nine different...

This paper studies the forces which determine how diversity at a firm evolves over time. We consider a dynamic model of a single firm with two levels of employees, the entry level and the upper level. In each period, the firm selects a subset of the entry-level workers for promotion to the upper...

The paper is concerned with instructions as a way of setting premises for subsequent decisions in models of teams à la Marschak-Radner, under information diversification. The paper suggests that instructions can bridge people's differences in knowledge: they do not require mutual understanding...

We explore the nature of Business Groups, that is network-like forms of hierarchical organization between legally autonomous firms spanning both within and across national borders. Exploiting a unique dataset of 270,474 headquarters controlling more than 1,500,000 (domestic and foreign)...

We explore the nature of Business Groups, that is network-like forms of hierarchical organization between legally autonomous firms spanning both within and across national borders. Exploiting a unique dataset of 270,474 headquarters controlling more than 1,500,000 (domestic and foreign)...

We explore the nature of Business Groups, that is network-like forms of hierarchical organization between legally autonomous firms spanning both within and across national borders. Exploiting a unique dataset of 270,474 headquarters controlling more than 1,500,000 (domestic and foreign)...

We investigate the scope for supervisory activities in organizations in which information is non-verifiable and opportunism severe. A principal-supervisor-agent hierarchy is considered. Side-contracts between supervisor and agent may be reached both before and after the agent has chosen his...

This paper studies how a three-layer hierarchical firm (principal-supervisor-agent) optimally creates effort norms for its employees. The key assumption is that effort norms are affected by the example of superiors. In equilibrium, norms are eroded as one moves down the hierarchy. The reason is...

The modern theory of economic organization asserts that the firm at its core consists of an “authority relation,” and that this is what distinguishes the firm from production processes coordinated by voluntary exchange in the market. This article expounds on and problematizes the uses of...