TY  - JOUR
AU  - Dessein,Wouter
AU  - Santos,Tano
TI  - The Demand for Coordination
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10056
PY  - 2003
Y2  - November 2003
UR  - http://www.nber.org/papers/w10056
L1  - http://www.nber.org/papers/w10056.pdf
N1  - Author contact info:
Wouter Dessein
Columbia University
E-Mail: wd2179@columbia.edu

Tano Santos
Graduate School of Business
Columbia University
3022 Broadway, Uris Hall 414
New York, NY  10027
Tel: 212/854-0489
Fax: 212/316-9180
E-Mail: js1786@columbia.edu
AB  - This paper endogenizes coordination problems in organizations by allowing for both ex ante coordination of activities, using rules and task guidelines, and ex post coordination, using communication and broad job assignments. It shows that: (i) Task specialization and the division of labor is mainly limited by employee discretion, rather than by the importance of coordination. In particular, specialization is often non-monotonic in the importance of coordination. (ii) Organizations exhibit increasing returns to ex post coordination. This rationalizes discrete `shifts' in organizational design from very rigid and specialized task assignments, to very flexible organizations characterized by extensive task bundling, intensive horizontal communication and substantial employee discretion. (iii) Broad task assignments and intensive horizontal communication are complementary. Hence, lower communication costs often result in less specialization.
ER  -