Coordination in Organizations: A Game-Theoretic Perspective

Abstract

Classic literature on organizations recognizes that the paramount function of an organization is the coordination of physical and human assets to produce a good or service (e.g., Barnard, 1938; Chisholm, 1989; Schein, 1985). Coordination in this early literature was defined broadly, as for example by Mooney (1947, p. 5): "Coordination therefore, is the orderly arrangement of group effort, to provide unity of action in the pursuit of a common purpose." Mooney argues further that coordination is the first principle of organization and that any other organizational principles "are simply principles through which coordination operates and thus becomes effective" (p. 5). The landmark work of Thompson (1967) distinguished kinds of interdependence that give rise to coordination problems and ways in which coordination might occur - for example, by standardization, planning, or mutual adjustment. Coordination also plays a central role in recent thinking about the economics of internal organization (Becker & Murphy, 1992; Milgrom & Roberts, 1992), the history of business organization (Lamoreaux & Raff, 1995, esp. p. 5), core competencies in business strategy, mutualism and legitimation in organizational evolution, macroeconomics (Cooper & John, 1988), and other fields.

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