Authority and Communication in Organizations

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  • 1 January 2000
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      • Published in RePEc
Abstract
This paper studies delegation as an alternative for communication. We show how a principal may give up control rights in order to foster the efficient use of information present in an organization. We point out how the benefits of delegation vary with the congruence between agent and principal, the risk-aversion of the principal and the uncertainty of the environment, and we identify an important role for intermediaries to limit the loss of control under delegation and yet preserve sufficient communication.
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