Allocating decision rights on the shop floor: a perspective from transaction cost economics and organization theory

This paper explores the links that the allocation of decision rights on the shop floor maintains with labor transaction attributes and several structural traits of the firm. The approach is based on the transaction cost apparatus and harnesses the theoretical and empirical background provided by organization theory. Data are presented from a wide field survey in the Spanish food and electronics industries (Standard Industry Classification (SIC) 20 and 36). Evidence not only verifies the influence of firm size, property, age, and unionism, but also shows that the allocation of decision rights is related to a particular mix of labor transaction traits. Specifically, one of the most important results is that employer opportunism offers greater explanatory power than employee opportunism.