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The decentralization of decision-making and flattening of managerial hierarchies within business firms can best be understood as a response to situations where employees hold knowledge that is superior to that held by firms' owners and managers. Decentralizing decision-making in those circumstances allows firms to utilize their employees' superior personal knowledge, often by encouraging them to act in creative, entrepreneurial ways, while requiring some reliance on intra-firm spontaneous order processes to co-ordinate the activities of the employees. This book adds an important component to the standard economic theory of the firm by exploring the implications of intra-firm knowledge dispersion. It also explains how firms engage in a process of continuing experimentation to create an organizational structure that fosters employee creativity and entrepreneurship.
Scholars in economics, entrepreneurship, organizational studies and management will find this book a fascinating exploration of firm behavior.
About: Over the last few decades, there has been a great deal of management literature recommending the removal of firms' hierarchies and the empowerment of employees.
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