| Abstract: | ABSTRACT Borrowing multi-contract theory from the organizational economics literature (Hart 1983; Holmstrøm 1982; Lazear and Rosen 1981) I build a multilevel channel framework of network control. This framework incorporates both multi-contract theory and the traditional dyadic approach. I also propose a dynamic perspective of the organizational control process that shifts from a dyadic pre-contractual model focused on the anticipated attributes of the bilateral relationship to a post-contractual phase focused on the interaction between dyads in a network of different contracts. It is difficult and costly to formulate an explicit contract that safeguards the principal's post-contractual interests (Ouchi 1979). Organizational learning and control based on comparative information can support such incomplete contracts. |
