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Cover of: Consistency in Organization
Ekkehart Schlicht

Consistency in Organization

Section: Article
Volume 164 (2008) / Issue 4, pp. 612-623 (12)
Published 09.07.2018
DOI 10.1628/093245608786534596
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Summary
Internal organization relies heavily on psychological consistency requirements. This perspective has been emphasized in modern compensation theory, but has not been extended to organization theory. The idea is developed by starting from Williamson's discussion of idiosyncratic exchange. The perspective sheds new light on several topics in the theory of the firm, like the boundaries of the firm (Williamson's puzzle), the importance of fairness concerns within firms, the attenuation of incentives, or the role of routines. It implies a perceptional theory of the firm that is realistic in the sense advocated by COASE [1937].