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North (1994)Management > Comparative Management > Lectures > Independent Research > North > Inefficient behaviour?
Inefficient behaviour?Institutions are responsible for indoctrination of an employee. A worker may have diverse values, but these are corrected and deviant behaviour is punished. Players following the "correct" model of behaviour are responsible for ensuring the continuity of the model across the organisation. Although institutions can affect the efficiency of a firm, they remain outside of economic analysis, partly because they do not fit within neo-classical theory and partly because they cannot be measured accurately. Institutions are not usually created for efficiency and "individuals typically act on incomplete information and with subjectively derived costs". Formal rules are not as objective as they first appear, as they tend to serve those with the bargaining power, that is, the managers or the government. "Ideological stereotyping" is the result of institutions and affects the consequent performance of economies.
Institutions and organisations
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