Language and the Theory of the Firm

S-Tier
Journal: Quarterly Journal of Economics
Year: 2007
Volume: 122
Issue: 1
Pages: 373-407

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We characterize efficient technical languages and study their interaction with the scope and structure of organizations. Efficient languages use precise words for frequent events and vague words for unusual ones. A broader organizational scope allows for more synergies to be captured, but reduces within-unit efficiency, since it requires a more generic language. A manager working as specialized translator may also be used to achieve between-unit coordination while maintaining separate languages. Our theory reconciles two recent well-documented phenomena within organizations: the recent increase in information centralization and the reduction in hierarchical centralization.

Technical Details

RePEc Handle
repec:oup:qjecon:v:122:y:2007:i:1:p:373-407.
Journal Field
General
Author Count
3
Added to Database
2026-01-25