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SSRN Electronic Journal
Article . 2004 . Peer-reviewed
Data sources: Crossref
International Economic Journal
Article . 2005 . Peer-reviewed
Data sources: Crossref
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The Two Institutional Logics: Exit-Oriented Versus Commitment-Oriented Institutional Designs

Authors: David Ellerman;

The Two Institutional Logics: Exit-Oriented Versus Commitment-Oriented Institutional Designs

Abstract

Throughout mathematics, science, engineering, and human affairs, there are two logics that are dual to one another (series-parallel duality). Albert Hirschman investigates the two logics as the parallel-oriented logic of exit and the series-oriented logic of commitment, loyalty, and voice. Economics focuses almost exclusively on the logic of exit so that all questions of institutional design are seen through that lens. Exit-oriented designs are the one size that fits all economic problems - the One Best Way. One goal here is simply to flesh out the alternative commitment-oriented logic of institutional design. The large Japanese-style firm is a major example of the commitment-oriented design in an organization. Another thesis is that each logic has an internal consistency so some mix and match hybrids can be more lethal than vigorous. In the East Asian crisis, highly leveraged firms from a commitment-oriented system of relational finance had taken advantage of the new funds available from globalized financiers operating under the exit-oriented logic of arms-length finance - and the hybrid proved to be unviable. Overall, my goal is to illustrate the two institutional logics that offer two different and often incompatible ways to approach questions of flexibility, performance, and efficiency.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
5
Average
Top 10%
Average
bronze