Authority inside the firm: multiple mechanisms of coordination

Bernard Baudry (1) , Bruno Tinel (2)

1 CALW - Centre Auguste et Léon Walras
2 MATISSE - UMR 8595 - Modélisation Appliquée, Trajectoires Institutionnelles et Stratégies Socio-Économiques

In the last twenty years, through a growing awareness of contractual incompleteness, the concept of authority has regained primacy in the analysis of the employment relationship. This article pursues two goals. First, we assess the famous controversy between Coase and Alchian and Demsetz via an analysis of the foundations of intra-firm authority. Second, we argue that intra-firm authority cannot hinge on a single variable and, to the contrary, rests on multiple mechanisms. The employer's authority over the employee is therefore not binary –infinite or null – and should be understood in terms of degree.

Mots clés: authority; firm; incomplete contracts; law and economics

Domaines: Economies et finances

Bernard Baudry, Bruno Tinel. Authority inside the firm: multiple mechanisms of coordination. 2004. ⟨halshs-00270905⟩