What are organizational economics?

There is a knowledge domain in economics and organizational design that many people do not know yet. This knowledge domain is the domain of organizational economics.

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What are organizational economics?

Organizational economics analyse organizational actions as outcomes of strategic, tactical and operational interplay using transactions and interactions among individuals inside and outside a formal organization as they respond to incentives or otherwise pursue their own interests.

Organizational economics thus look inside the traditional “black box” of a corporate company or large public authority organization, a startup, a scaleup and an SME by examining the task of organizing and especially motivating and coordinating human activity in a micro-economic context across the relevant business ecosystem of the organization concerned.

As the online platform economy is developing and  online & offline markets become more efficient the organizational form (with its complexity) of the traditional large company becomes uneconomic, since companies can only exist and survive to the extend that they can create more customer value & avoid or reduce unnecessary costs more effectively than others, like successfull startups and scaleups that use the organizational design of the virtual organisation.

The traditional large company becomes uneconomic.

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