StudentShare solutions
Triangle menu

Economics of Organisations TAKE HOME EXAM (For Second Writer) - Essay Example

Not dowloaded yet

Extract of sample
Economics of Organisations TAKE HOME EXAM (For Second Writer)

When there is a team effort like this, you have information problems: it is hard to tell who is shirking.
"The essence of the classical firm is identified here as a contractual structure with: 1) joint input production [team efforts]; 2) several input owners [e.g. each laborer owns himself]; 3) one party who is common to all the contracts of the joint inputs [the employer/owner]; 4) who has rights to renegotiate any input's contract independently of contracts with other input owners [e.g. can hire, fire, etc. to reward inputs that contribute more]; 5) who holds the residual claim [i.e. gets the "residual" income; see below]; and 6) who has the right to sell his central contractual residual status [i.e. can sell the company]."
In earlier literature regarding the theory of the firm, many argued with Alchian and Demsetz. According to Organizations and Markets.com (2009 p. 1), "The striking insight of Alchian and Dernsetz (1972) and Jensen and Meckling (1976) is in viewing the firm as a set of contracts among factors of production. In effect, the firm is viewed as a team whose members act from self-interest but realize that their destinies depend to some extent on the survival of the team in its competition with other teams." Fama criticizes Alchian and Demsetz, however, for failing to eliminate the entrepreneur from the picture; their theory still includes an employer who, like an entrepreneur, polices shirking because he collects the benefits of doing so."
Alchian and Demsetz had their own unique view of the firm. It is presented in the following diagram:
Figure 2: Organizational Chart

Source: Emerald Insight (2009 p. 1)
Their arguments have their good points and their bad points. I do believe authority plays a large role in the success of organization and that too much authority and/or too little authority can certainly bring a firm down, but I also believe that information is way more than valuable to the rise of a firm, and therefore the cost of it is duly justified. I am just not sure at this point which is more important. Perhaps they are of equal importance.
One could argue that every little function within an organization could make or break that organization. These are just two points of view that we are presented with. Perhaps a broader spectrum of ideas would help to justify one side or the other of the argument. The ideas would come from multiple departments within the organization instead of a few elite professionals. The broader the spectrum is from which to choose, the better conclusion one can make.

References
Alchian, AA. Principles of Professional Advancement 1996. Economic Inquiry, Vol. 34.
Alchian, AA, JM Buchanan; H Demsetz, A Leijonhufyud, et.al. 1996. Economic Inquiry. Vol. 34.
Alchian and Demsetz: Production, Information Costs, and Economic Organization 2009. Wikisum. Available at ...Show more

Summary

It is a well-known fact that Alchian and Demsetz attempt to counter the claim that the essence of the employment relation is authority. Coase argued differently, by saying that firms have the tendency to acquire high internal costs through continuously negotiating new contracts…
Author : tschowalter
Economics of Organisations TAKE HOME EXAM (For Second Writer) essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Economics of Organisations TAKE HOME EXAM (For Second Writer)"
with a personal 20% discount.
Grab the best paper

Related Essays

Take Home Exam for Com 100
Kwame Anthony Appiah makes a strong contention in “Race, Culture, Identity: Misunderstood Connections” that race only cropped up as a result of an ideational notion – a framework that interrelates “race” with “idea”; that that concept of race is based on the way people think about “race” – and relational account – the notion of race is based on how the word “race” has been applied, not just at the present times, but also in its historical past.
5 pages (1250 words) Essay
Economics of Organisations TAKE HOME EXAM
A great deal of fuel has been poured into the field of economic research in the past few decades. There is a theory that states that there are markets with asymmetric information, and this theory also states that this is an very important part of economic research.
3 pages (750 words) Essay
Economics of Organisations TAKE HOME EXAM (Third Writer)
The lofty minimum wage was made possible by Henry Ford's manufacturing breakthrough: the constant-motion assembly line, which carried moving cars past lines of workers. The first modern assembly line, Ford's process allowed him to build cars faster and cheaper than anyone else could.
3 pages (750 words) Essay
Economics of Organisations TAKE HOME EXAM 1 writer for all 3 questions
Williamson concentrates on the vitality of asset specificity and investment. He distinguishes 3 crucial scopes of transactions and they are: extent of asset specificity; level of uncertainty; and regularity of transactions. Also asset specificity is the required state for continuation of transaction costs.
9 pages (2250 words) Essay
TAKE HOME EXAM for the class ECONOMICS OF RACE AND GENDER
Firstly, it allows the people to network outside their box of self comfort and permits people from different backgrounds to build solid business alliances and also learn from the experts in various fields. Also the differences among the people and the quality of life of
4 pages (1000 words) Essay
Take Home Exam For The Class Economics of Race & Gender
There are many multinational companies which are operating in many countries, diversity for them is very important. They can benefit from a diverse workforce, because when people belong to different ethnic groups or cultures they hold different opinions. These opinions can
10 pages (2500 words) Essay
Take Home Exam For The Class Economics of Race & Gender
e that no company discriminates among the prospective employees based on the culture, caste, race or gender helps in reduction of labor market discrimination. Secondly, the growing acceptance of a level of pay for the job instead of based on the gender of the individual helps in
5 pages (1250 words) Essay
Take home exam for law and ethics
A policy decision made from its headquarters back in the US canbe of interest in China, because the company operates a facility in the country. This highlights the internationalization of corporations in such a way that practices are now being required to
7 pages (1750 words) Essay
Take home exam for law and ethics
During that time, the G7/8 fastly started to address the demeanor of large MNC themselves. For countries like Russia, it took up the necessity for a stable rule of law of companies and a corporate culture to
7 pages (1750 words) Essay
Take home exam for the class (economics of race and gender )
This discussion also brings us to the theory of social inequality that exists in organized societies since this is crucial in our objective to understand the effect of social
5 pages (1250 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation