Quality and structure of organizational decision-making

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15 Scopus citations


In this paper organizational quality is defined in terms of the decision criterion the organization applies. This quality determines the decisional skills of the individual decision makers and, in turn, the optimal structure of decision making. The assumption that individual decisional skills are determined endogenously is the distinctive and novel characteristic of our framework. Our analysis focuses on the relationship between quality and structure of decision making in organizations. In particular, we study the following issues: How are organizational quality, individual decision-making skills and the structure of the organization related? How does the size of the organization affect its optimal quality? Our results imply that evaluation of organizational performance and comparison of organizations solely on the basis of their quality can be misleading. This is true because the performance of organizations is determined by their quality as well as by their structure and size.

Original languageEnglish
Pages (from-to)521-534
Number of pages14
JournalJournal of Economic Behavior and Organization
Issue number4
StatePublished - 1 Sep 1998

Bibliographical note

Funding Information:
We are indebted to Miriam Krausz, Richard Day and to an anonymous referee for their useful comments. The first author acknowledges the support of the Schnitzer Foundation for Research on the Israeli Economy and Society.


  • D7
  • Endogenous decisional skills
  • Organizational decision making
  • Quality
  • Structure


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