[EcInfCom] New | Contents | Home | OGU Home


"On the Optimal Size of Economic Organization: The Benefits and the Costs of Centralization and Decentralization," Studies in Regional Science, Vol.21, No.2, December 1991, pp.9-23.

[Outline]

This paper considers the determinants of the optimal size of economic organizations and the benefits and costs of centralization and decentralization. After observing that this question arises with a broad class of organizations including regional and spacial ones, it focuses on an economic organization, the business firm. The paper first asks: why are factors of production, like managers, workers, and capital equipment, integrated into a firm for production? How is the boundary of the firm formed? In short, what is meant by the optimal size of the firm? It then proceeds to argue that the size of the firm is basically determined by the costs of operating it, and different costs of operating the firm are identified. New information technology affects the size of the firm by changing the relative magnitude of the costs. The paper attempts to assess the effects of new information technology on the degree of centralization and decentralization of the firm.

Top of Page


[Keywords]

economic organization, centralization, decentralization, transactions cost, size of business firm, boundary of firm, cost of integration

Top of Page


[Table of Contents]

Top of Page


[Full Text]

Top of Page


Back to Pub List Index | Back to Pub List Index (Japanese)


Top of Page | New | Contents | Home | OGU Home

Hajime Oniki
ECON, OGU
09/02/2006
HTML4.0