TITLE

Simplistic vs. Complex Organization: Markets, Hierarchies, and Networks in an Organizational Triangle

AUTHOR(S)

Elsner, Wolfram; Hocker, Gero; Schwardt, Henning

PUB. DATE

March 2010

SOURCE

Journal of Economic Issues (M.E. Sharpe Inc.);Mar2010, Vol. 44 Issue 1, p1

SOURCE TYPE

Academic Journal

DOC. TYPE

Article

ABSTRACT

Transaction cost economics explains organizational forms in a market vs. hierarchy dichotomy as hybrids of those two ideal forms. The present paper, in contrast, argues that pure market and hierarchy, including their potential formal hybrids, are an empirically void set and that coordination forms have to be conceptualized in a fundamentally different way. A relevant organizational space must reflect the dilemma-prone direct interdependence in a complex world that either leads to (1) informally institutionalized, problem-solving cooperation (the instrumental dimension of institutionalization), or (2) mutual blockage, lock-in, and power- and status-based market and hierarchy failure (the ceremonial dimension of institutionalization). Institutionalized cooperation is established as a genuine organizational dimension that generates a third "attractor" in the new organizational space. Thus, an organizational triangle is constructed as a more realistic heuristic device for empirical organizational research. The Organizational Triangle is then tentatively applied in a couple of case studies.

ACCESSION #

48811366

Tags: MARKETS;  ORGANIZATIONAL structure;  COMPLEX systems;  TRANSACTION cost theory of the firm;  ORGANIZATIONAL behavior;  HEURISTIC

 

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