Economics Dictionary of ArgumentsHome
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| Corporate structure: Corporate structure in economics refers to the organization of different departments, roles, and responsibilities within a company. It defines how authority, communication, and decision-making are distributed, commonly through hierarchies like functional, divisional, or matrix structures, impacting efficiency, strategy, and governance. See also Business, Business Size, Market concentration, Vertical Integration._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Armen A. Alchian on Corporate Structure - Dictionary of Arguments
Henderson I 48 Corprate structure/Organisation/Alchian/Demsetz/Henderson/Globerman: Concentrated ownership has (…) emerged as a relatively effcient organizational form in service activities such as law firms and engineering firms primarily because the arrangement minimizes the combined costs of monitoring and shirking. Expertise: Alchian and Demsetz pointed out that in certain types of activities where specialized expertise is the main input to the production process, as is arguably the case for legal services, monitoring costs can be prohibitively high for owners who do not have the specialized expertise in question. Responsibility: In these cases, organizations are frequently structured as limited partnerships, whereby a substantial proportion of the professionals who work in the organization are also owners of the organization. Incentives: As owners, the limited partners have an incentive to monitor shirking by the professionals working for the organization. They also have the expertise to identify shirking better than would be done by outside shareholders. >Principal-agent problem, >Incentives, >Responsibility, >Tort law, >Private property/Alchian, >Vertical integration._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Alchian I Armen A. Alchian William R. Allen Exchange and Production: Competition, Coordination and Control Belmont, CA: Wadsworth 1977 Henderson I David R. Henderson Steven Globerman The Essential UCLA School of Economics Vancouver: Fraser Institute. 2019 |
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