"This paper analyzes the relations between knowledge, control and organizational structure both in the market system as a whole and in private organizations. Limitations on the mental capacity of the human mind and the costs of producing and transferring knowledge means that knowledge relevant to all decisions can never be collected in the mind of a single individual or a small body of experts. This means that if the knowledge valuable to a particular decision is to be used in making that decision, there must be a system for partitioning out decision rights to individuals who already have the relevant knowledge and abilities or who can acquire or produce them at the lowest cost. Self interest on the part of individual decision-makers means a control system is required to motivate individuals with the decision rights and the relevant knowledge to use those decision rights appropriately. This control problem is solved in a capitalist economy by a system of alienable property rights."
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Academics from the United StatesEconomists from the United StatesBusiness theorists from the United States
Original Language: English
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Michael C. Jensen and William H. Meckling. "Specific and general knowledge and organizational structure." (1992).
https://en.wikiquote.org/wiki/William_H._Meckling
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William H. Meckling
William H. Meckling (1921 - May 15, 1998) was an American economist and professor of Management and Government Policy and Dean at the , University of Rochester, working in the areas of "managerial economics and the economic analysis of law, and his work received international recognition" (Source: Currents, 1998).
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