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Comparative Economics by E. Neuberger, J. Montias, A. Ben-Ner

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6. COALITIONS IN ORGANIZATIONS: LABOR UNIONS

6.1. Power in organizations

In the course of previous chapters, we have frequently had occasion to refer to the relative power of different groups within organizations. In Chapters 3 and 4, we proposed to define the implicit goal of an organization in terms of a Nash product where the utility gains of members, or groups of similar members, were raised to a power reflecting their ‘weight’ in the organization. The weights assigned to the various groups – if they have the option of bargaining explicitly or implicitly – measure their power in affecting the distribution of the surplus or payoff generated by the organization. The power of a group or ‘party’ depends positively on its ability to inflict harm ...

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