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date: 20 September 2020

Abstract and Keywords

The rational choice perspective to organizational analysis directs us to understand the design, the boundaries, and the operation of control and coordination mechanisms, each from the standpoint of individual rational purposive action. It does, however, under specified assumptions permit the individual to be replaced by a collective actor like a group. This chapter promotes an interdisciplinary approach to the analysis of organizations based upon rational choice theory. Five mechanisms of organizational control and coordination are identified: incentives, monitoring, power and influence, participation, and organizational culture. The vertical, horizontal, and hierarchical boundaries of organizations are studied in the context of these mechanisms.

Keywords: rational choice, incentives, power, culture, vertical integration, horizontal integration, hierarchy

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