Organizations as Coordinating Devices

The purpose of this paper is to offer a complex view of organizations as coordinating devices. In Section I, I briefly discuss the contractual interpretation, and I point out the inadequacy of contracts alone to coordinate organizational activities. In Section II, I explore the nature and characteristics of coordination through command, and I suggest making a distinction between authority and hierarchy. In Section III, I compare these two forms of coordination and show how they both operate. I conclude that it is the capacity of organizations to combine contract and command that determines their efficiency.