
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Transcribed Image Text:Why do firms form internal labor markets/use bureaucratic control? According to
Doeringer and Piore it is:
O because employees learn skills on-the-job and the firms wish to reduce turnover.
O in large firms where the owners can't directly observe how hard their employees are
working it is to increase work effort and to make sure the job is done correctly.
O in order to prevent other firms from hiring away their most productive employees.
O to allow the firm to pay an optimal wage that will reduce the probability that workers will
shirk on the job.
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