Economic theory is growing not only in depth but in the breadth of its application as well. This study encroaches in part on a field normally considered as the domain of Sociology. But the methods applied here are those of mathematical economics. It has not been my ambition to make this as general and as mathe­ matically demanding as possible. On the contrary, I wanted to present as simple an argument as possible throughout. I wish to thank Brown University for granting me a Sabbatical leave in the Fall of 1977-78 in the course of which I wrote the first draft of this monograph. I am also grateful to the late Professor Jacob Marschak and to Professor Arthur Geoffrion for sponsoring me as a Visiting Scholar of the Western Management Science Institute, Graduate School of Management, UCLA for the months of November and December 1977. The Western Management Science Institute proved to be an ideal environment for writing: protective and stimulating at the same time. I have benefitted specifically from comments received as a result of presenting Chapters IV and V in the Marschak Colloquium on December 2, 1977, in particular by Professors Intri11igator and Spiro. My greatest indebtedness is to Jacob Marschak to whom I owe my awareness of and interest in the economic theory of organizations. He was my teacher, my director and supervisor, and my fatherly friend since 1950. It is thus entirely fitting that this work should be dedicated to his memory.

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I. Control.- 1. Supervision.- 2. Rank in Supervision.- 3. Rank in General.- 4. Span of Control.- General References.- II. Capacity.- 5. Bounds.- 6. Assignment of Work and Supervision.- 7. Excess Capacity.- 8. Size.- 9. Illustrations.- III. Scale.- 10. The Ratio of Administration to Workers.- 11. Lean and Fat Organizations.- 12. Cost and Scale.- 13. Presidential Salaries Exceptional.- 14. Regular Organization.- References.- Careers.- IV. Probabilities of Promotion.- 15. Careers Defined.- 16. Certainty.- 17. Risk.- 18. Probability of Reaching Rank r.- 19. Limits.- 20. Bounds.- 21. Comparative Statics.- 22. Constant Promotion Probability.- 23. Illustrative Calculations.- 24. Stochastic Times.- 25. Growth.- 26. Alternative Model.- References.- V. Salaries: Competition.- 27. The Graduate's Dilemma.- 28. Career Utility.- 29. Mobility.- 30. Market Equilibrium.- 31. Logarithmic Utility.- 32. Prestige.- 33. Comparative Statics.- 34. Presidential Compensation.- 35. Expected Value.- 36. Minimizing Salary.- 37. Careers Compared.- 38. Non-neutral Prestige.- 39. Equilibrium Restated.- References.- VI. Salaries: Monopsony.- 40. Objectives.- 41. Analysis.- 42. Special Utility Functions.- 43. Wage Bill.- 44. Regular Organization.- 45. Case of sR = s-1.- 46. Mobility and Monopsony.- 47. Some Salary Schedules: Military.- 48. Salary Schedules: Civil Service.- References.- VII. Distribution of Income.- 49. Basic Assumptions.- 50. Income Distribution Derived.- 51. Aggregation.- 52. Distribution of Highest Incomes.- 53. Aerage Incomes Through Time.- 54. Lifetime Income.- 55. Top Executive Compensation.- References.- 56. Illustrative Careers.- Army, Navy.- Foreign Service Officers.- Department of Housing and Urban Development.- HUD: Lower Ranks.- NASA.- NSF Academic Career: UCLA 108.- 56a. Comparison of Calculated Expected Utilities.- References.- Management.- VIII. Managerial Production Function.- 57. Inputs and Outputs.- 58. Homogeneity.- 59. Alternative Formulation.- 60. Efficiency.- 61. Short Run.- 62. Medium Run.- 63. Constant Salary Span.- 64. Cost Curves.- References.- IX. Minimum Average Cost.- 65. Shape of Average Cost.- 66. Value of Minimum Average Cost.- 67. Change of Scale.- 68. Labor Productivity.- 69. General Homogenous Production Function.- X. Theory of the Firm.- 70. Management: The Limiting Factor ?.- 71. Capital.- 72. Profit Maximization.- 73. Supply function.- 74. Profits.- 75. Industry Dynamics: Price Unequal Average Cost.- 76. Price Equal to Average Cost.- References.- Conclusion.- Conclusion.- 77. Decomposition.- 78. Staff Versus Line.- 79. Demotion and Firing.- 80. Selectivity in Promotion.- 81. Social Mobility.- References.- Appendix A: Short Run Allocation of Work in an Organization with Excess Capacity.- 82. A Linear Program.- 83. Efficiency Conditions.- 84. Specialization.- Appendix B: From Kautiliya'S Arta Shastra.- 85. Concerning Subsistence to Government Servants.- Appendix C: Monopsony in Inputs and Wages.- 86. Pre-established Harmony.- 87. Simultaneous Optimization.- 88. Interpretation of Result.- Basic Notation.- Index of Names.- Index of Subjects.