Firms Struggle to Maintain Fairness as Incentives Erode, Boundaries Blur
The article explores how consistency impacts how companies are organized, a topic often overlooked in firm theory. By considering consistency's role in setting up internal structures, the study connects it with pay theories. This perspective offers fresh insights into many areas, such as where firms draw their boundaries, the significance of fairness at work, how motivation is affected, and the influence of standard procedures and rewards. The findings suggest that understanding how firms operate is best done by looking at how people perceive them, matching a view supported by economic thinker Ronald Coase.