Latent and Explicit Authority in Hierarchical Organizations

We consider the problem of the exercise of authority within social production organizations, embedding the decision makers into a structure of formal authority relationships. We distinguish two types of behavior. First, we introduce an equilibrium notion implementing latent authority under which subordinates submit themselves to authority even though such authority is not en- forced explicitly. Second, we compare this with a non-cooperative equilibrium concept describing explicit exercise of authority. We show that for low enough enforcement costs both forms of authority will be exercised in equilibrium, but for higher enforcement costs latent authority will be exercised while explicit authority will not.

Sharing services, saving money? Five risks to cost saving when organizations share administrative services

Shared services are a popular reform for governments under financial pressure. The hope is to reduce overheads and increase efficiency by providing support services like HR, finance and procurement once to multiple agencies. Drawing on insights from organization theory and political science, we identify five risks that shared services won’t live up to current expectations. We illustrate each with empirical evidence from the UK, Ireland and further afield, and conclude with suggestions on how to manage these risks.