Foundations of Organizational Strategy

In this volume, Michael Jensen and his collaborators present the foundations of an integrated theory of organizations. The theory assumes that organizations are equilibrium systems that, like markets, can be influenced, but cannot be told what to do; that human beings are rational and self-interested for the most part; and that information is costly to produce and transfer among agents. The theory also treats business organizations as entities existing in a system of markets (including financial, product, labor, and materials markets) that must be considered in the formulation of organizational strategy. Jensen argues that three critical systems, which he calls the organizational rules of the game, are necessary to substitute for alienability in organizations: (1) a system for allocating decision rights among agents in the firm, (2) a system for measuring and evaluating performance in the firm, and (3) a system for rewarding and punishing individuals for their performance.

First sentence: The twelve chapters in this volume lay out the foundations of an integrated theory of organizations.

Year

1998

Language

English

Publisher

Harvard University Press

Editions

1

Pages

430

ISBN

9780674005648

Data source: Wikidata