Voting in Firms: The Role of Agenda Control, Size and Voter
Voting is a common feature of economic organizations. A study explores the costs that collective decision making impose on firms and examines how the institutional characteristics of surviving firms are shaped by these costs. The analysis focuses on the specific case of employee-owned firms. It is s...
Saved in:
Published in | Economic inquiry Vol. 29; no. 4; p. 706 |
---|---|
Main Authors | , |
Format | Journal Article |
Language | English |
Published |
Huntington Beach
Western Economic Association
01.10.1991
|
Subjects | |
Online Access | Get full text |
Cover
Loading…
Summary: | Voting is a common feature of economic organizations. A study explores the costs that collective decision making impose on firms and examines how the institutional characteristics of surviving firms are shaped by these costs. The analysis focuses on the specific case of employee-owned firms. It is shown that unrestricted voting can lead to unstable decision making and that firms make trade-offs among collective decision making, production scale, firm structure, and voter characteristics that are consistent with efforts to economize on the costs of voting. Firm responses include: 1. agenda control, 2. restrictions to obtain a homogeneous voting population, and 3. limits on firm size. In examining 3 long-surviving producer cooperatives representing extreme cases of collective decision making, it is found that their organization is sensitive to the costs of voting and to the employment of mechanisms to constrain those costs. |
---|---|
ISSN: | 0095-2583 1465-7295 |