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  • Identity and the Economics of Organizations

    The ability to place workers into jobs with which they identify is central to what makes organizations work. The authors discuss the limits of monetary incentives and the power of an identity-enhanced economic model to encourage a new view of a variety of management policies, organizational behaviors, and employment policies. They argue that identity is the next step in the evolution of the economic modeling of organizations, and show that the simplest representation of an organization is equated to its physical capital: a more sophisticated view adds the specific human capital of employees to the description of the firm. Insofar as the firm can profitably motivate its employees through such attachments, these investments should be considered a part of the capital of the organization, its motivational capital.
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