Self-organizing teams

In the past decades, firms have decided to replace part of their hierarchical structure by self-organizing teams whose members have been authorized to match themselves to teams. On the one hand, this delegation of matching authority leads to a better use of agents' decentralized information about optimal team composition. On the other hand, authority can be abused for opportunistic mismatching, which constitutes a new kind of moral-hazard problem. I show, under which conditions this problem arises so that the firm might even forgo self-organizing teams though being efficient. (C) 2017 Elsevier B.V. All rights reserved.