London School of Economics and Political Science (LSE)

Modules

Organisation theory: an interdisciplinary approach [127]

1. Introduction

• Attempts to define organisations of differing types and differing objectives. Normative and positive theories.

• Division of labour, specialisation, productivity, economies of scale and the problem of co-ordination (motivations/incentives and information).

• Markets and organisations as alternative coordinating mechanisms. Contrasting market and employment contracts (incentives, risk sharing and information assets).

• The market organisational contractual continuum. Competitive markets, ‘real’ markets, long term contracts (fixed cost to cost plus), joint ventures, alliances, informal networks, franchising etc.

• Coordination and role of: motivation/incentives, communication/ information/knowledge, bargaining power and authority, culture/ norms/trust/commitment, democratic process

• Introduction to the nature of hierarchical organisations.

• Vertical boundaries (make-buy).

• Horizontal boundaries (Divisional, conglomerates etc).

• Hierarchical structures (size, span, depth).

• Ownership/governance.

2. Theories of boundaries

• Transaction costs; assumptions, bounded rationality, opportunism, incomplete contracts; transactional characteristics, asset specificity, uncertainty, complexity, frequency. Team production and externalities. 

• Property rights theory.

• Monopoly power, information knowledge and rents, competitive advantage.

• Role of managerial objectives/motivation.

• Role of legislation (national variations).

• Ideology.

3. The evolution of organisations

• Evolution of contracts.

• Evolution of organisational types: peer groups, multifunctional; multi-divisional, conglomerates, Alliances, networks, long term (relational), contacting. Centralised v decentralised organisation (discretion).

4. Studying organisations

• Organisation, group and individual levels of study and their inter-relationship.

• Contribution of statistical models and case studies,

• Contribution of elementary game theory (one-shot and repeated).

• Contribution of network (graph theoretic) models.

• Critical theories of organisation.

5. Organisations as contractually coordinated mechanisms

• Taylor, standardisation, rationalisation and scientific management; “Fordism”.

• Theories and critiques of bureaucracy.

• Centralisation, decentralisation and discretion/incomplete contracts.

• Organisation as an algorithm.

• Control loss, coordination loss.

6. Organisations as incentive/motivationally coordinated mechanisms

• Introduction to principal agent theory.

• Team production and externalities.

• Psychological models of motivation: Human relations; Human resource management; Group and team context (production); Motivational reactions to organisational design.

7. Organisations as authority/power/coordinated mechanisms

• Nature of power. Authority and influence.

• Bargaining power

• Sources of power

• Power and participation/decentralisation

8. Organisations as information/knowledge distributively coordinated mechanisms

• Coordination and information (games).

• Theory of teams.

• Hidden information/action.

• Demand for information and participation.

9. Organisations as ‘culturally’ coordinated mechanisms

• Nature of culture.

• Trust, leadership, sacrifice and commitment.

• Social capital.

• Corporate culture/ambient cultures.

• National business system.

10. Determinants of hierarchal structures (shape)

• Contingency theory.

• Population ecology/institutional theory.

• Hierarchy (or hybrid organisation) as an optimal mechanism – given operating environment - for combining: rules/contracts, incentives, authority, information, culture.

11. Corporate governance

• Ownership and control; participation and organisational democracy.