Modeling coordination in organizations and markets

Modeling coordination in organizations and markets

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Article ID: iaor19932138
Country: United States
Volume: 38
Issue: 12
Start Page Number: 1819
End Page Number: 1826
Publication Date: Dec 1992
Journal: Management Science
Authors:
Keywords: marketing, information
Abstract:

Thomas Malone utilizes the concept of vulnerability costs in order to compare the degree of flexibility exhibited by markets and hierarchies. The purpose of this note is to redefine the concept of vulnerability to include the corresponding opportunity costs that are created when a coordinating structure restricts the ability to adjust to a change in market conditions. The conclusion reached is that those structures experiencing the lowest opportunity costs are the least vulnerable, and can therefore be classified as the most flexible.

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