The paper outlines elements of the economic theory of organisational behaviour relating to bureaucratic organisations and illustrates it with an example of a government office. The office is responsible for implementing an isolated policy target, involving redistribution of income. It is assumed to be a monopolist in its area of activity, which consists in identifying households in need of assistance and organising an appropriate form of State support for them. The key form of assistance is budgetary transfers to those households.

The monopolistic office seeks to maximize its utility function incorporating two arguments, the output level and employment. Output levels are measured by the number of households to which assistance is finally extended. From the utility function, cost function is derived and output level determined. This level is additionally influenced by politicians' "demand" for the services of the office. The politicians' preferences are probably determined by the limited size of the budget they are prepared to assign to a given project. The question arises as to whether the office, the monopolist in its field, is able to "extract" the entire amount potentially earmarked to its activities, at the same time realising its preferences as to the choice of technology (or the cost level)? The final result tends to be that the monopolistic office renders its services at a relatively high cost and on a scale exceeding the optimal social benefit.