An Empirical Investigation of Oliver Williamson's Organisation of Work

Harminder Battu, Robert McMaster, M. White

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Oliver Williamson argues that the attributes of the employment contract, like intermediate transactions in general, are essentially driven by the specificity of assets. In the case of the organization of work it is the particular attributes of labour that determines the transaction costs of any given governance structure. The paper presents a stylized account of the transaction cost model of the efficient organization of work, stressing an underlying tension and ambiguity in the transaction cost framework. The paper exploits a unique dataset to test, for the first time with British data, Williamson's transaction cost predictions concerning the nature of employment contracts. Williamson tacitly assumes that asset specificity is exogenous in general. However, there is evidence in the literature that labour specificity is endogenous to employment contracts. The paper endeavours to demonstrate that there is empirical evidence to suggest that specialized labour is indeed endogenous in the transaction cost model. The major implication is that the organization of work cannot be considered as an example of the efficient organization of intermediate transactions.

Original languageEnglish
Pages (from-to)1657-1669
Number of pages12
JournalApplied Economics
Volume34
Issue number13
DOIs
Publication statusPublished - 2002

Keywords

  • TRANSACTION COST ECONOMICS
  • CONTRACT

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