A Framework For Analysis Of Coordination Mechanisms In Decentralized Organizations

This paper has three purposes: (1) to present a framework for classifying and analyzing conceptual models of the resource allocation process in a decentralized organization, (2) to explain some different coordination strategies, and (3) to show that a typical coordination mechanism (pricing) may not work well in certain types of organization environments. The framework proposed recognizes the existence of dif- ferent kinds of conflict within a two level decentralized organization: conflict between decision making units over shared resources and conflict between levels of decision making units over what objectives should be pursued. When both types are present a different kind of coordinating mechanism is required.