Economic behavior within organizations

Cover -- Frontmatter -- Contents -- Preface -- Introduction -- A Overview of the theory and core definitions -- B Three analytical points and progress in connection with them -- Definitions and determinants of employees' discretion over an organization's resources and production -- A An organization's production functions, its production domains, and its employees' discretion over resource substitutions -- B Information about production domains -- Employees' resource diversions and employers' imposition of resource responsibility -- A Employees' resource diversions -- B Types of resource responsibility -- C The determination of cash salaries under overall value and specific responsibility and the supply of labor to the organization -- D Issues affecting the employer's optimal choices in imposing resource responsibility constraints -- Short-run resource allocation under fixed budgets -- A Resource allocation with a fixed budget and no spillovers under overall value responsiblity -- B Resource allocation with a fixed budget and no spillovers under specific responsibility -- C The coordination of employees' actions in relation to internal technological spillovers under each type of responsibility -- D Summary of demands for information and implications for the dispersion of information within the organization -- Short-run resource allocation in response to demand: the cases of an employee, a private corporation, and a private nonprofit organization -- A Costs to the employer and to the employee of the employee's delivered output and simplifying assumptions about these costs -- B Short-run resource allocation when an employee responds to a managing employee's demand -- C Short-run price, income, and output of the private corporation -- D Short-run resource allocation of the private nonprofit organization.

This book provides a comprehensive economic analysis of the internal working of organizations. Its attention to the role of information costs in influencing the breadth of discretion that members of an organization have, and the nature and effectiveness of the constraints that can be put upon them, leads to many important hypotheses about organizational behavior. These hypotheses are relevant to both private and public organizations, to charitable and profit-making ones, to bureaucracies and legislatures, and to organizations in free market and centrally planned economies. Stephen Hoenack proposes that managers' optimal choices of constraints in the face of information costs ordinarily leave subordinates with some latitude to use resources in pursuit of their own objectives. Employees can thus create an economy within the organization that responds to their goals as well as to the demands of external constituents