Access the full text.
Sign up today, get DeepDyve free for 14 days.
Nahum Melumad, Toshi Shibano (1991)
Communication in settings with no transfersThe RAND Journal of Economics, 22
P. Aghion, P. Bolton (1992)
An incomplete contracts approach to financial contractingThe Review of Economic Studies, 59
Jay Galbraith (1977)
Organization Design
Maria Goltsman, Gregory Pavlov (2011)
How to talk to multiple audiencesGames Econ. Behav., 72
Luis Garicano (2000)
Hierarchies and the Organization of Knowledge in ProductionJournal of Political Economy, 108
Julie Wulf (2007)
*Authority, Risk, and Performance Incentives: Evidence from Division Manager Positions Inside FirmsERN: Behavioral Economics (Topic)
M. Colombo, Marco Delmastro (2008)
The economics of organizational design
T. Bresnahan, S. Greenstein, R. Henderson
Organizational diseconomies of scope in computing
Heikki Rantakari (2009)
Organizational Design and Environmental VolatilityNew Institutional Economics
Ricardo Alonso, Wouter Dessein, Niko Matouschek (2006)
When Does Coordination Require Centralization?CEPR Discussion Paper Series
James Brickley, Clifford Smith, J. Zimmerman, Janice Willett (2003)
Designing organizations to create value : from structure to strategy
O. Hart, J. Moore
On the design of hierarchies: coordination versus specialization
Venky Nagar (2002)
Delegation and Incentive CompensationThe Accounting Review, 77
Ying Chen, Navin Kartik, J. Sobel (2008)
Selecting Cheap‐Talk EquilibriaEconometrica, 76
J. Stein (1989)
Cheap Talk and the Fed: A Theory of Imprecise Policy AnnouncementsThe American Economic Review, 79
Marco Delmastro, M. Colombo (2004)
Delegation of Authority in Business Organizations: An Empirical TestOrganizational Behavior
Jay Galbraith (1973)
Designing Complex Organizations
O. Hart, Bengt Holmström (2002)
A Theory of Firm ScopeCorporate Finance: Governance
H.A. Simon
Administrative Behavior
V. Crawford, J. Sobel (1982)
STRATEGIC INFORMATION TRANSMISSIONEconometrica, 50
H. Rantakari
Governing adaption
L. Garicano, T. Santos
Referrals
G. Friebel, Michael Raith (2009)
Resource Allocation and Organizational FormResource Based Strategy & Policy eJournal
Stephen Tallman (1990)
Managing across Borders: The Transnational SolutionJournal of International Business Studies, 21
Robert Bushman, Raffi Indjejikian, Abbie Smith (1995)
Aggregate performance measures in business unit manager compensation: The role of intrafirm interdependenciesJournal of Accounting Research, 33
S. Li, X. Weng
Random authority
S. Li, X. Weng
Bidding for authority
Joseph Farrell, R. Gibbons (1989)
Cheap Talk with Two AudiencesThe American Economic Review, 79
Wouter Dessein, Luis Garicano, Robert Gertner (2007)
Organizing for SynergiesCorporate Finance: Governance
A. Chandler
Strategy and Structure: Chapters in the History of the American Enterprise
P. Lawrence, J. Lorsch
Organization and the Environment
Johnathan Roberts (2004)
The Modern Firm: Organizational Design for Performance and Growth
M. Battaglini (2002)
Multiple Referrals and Multidimensional Cheap Talk
Ricardo Alonso, Wouter Dessein, Niko Matouschek (2012)
When Does Adaptation Require Decentralization?ERN: Other Organizations & Markets: Decision-Making in Organizations (Topic)
S. Athey, Donald Roberts (2001)
Organizational Design: Decision Rights and Incentive ContractsIO: Firm Structure
G. Friebel, Michael Raith (2006)
Resource Allocation and Firm ScopeIO: Theory
P. Bolton, Joseph Farrell (1990)
Decentralization, Duplication, and DelayJournal of Political Economy, 98
Purpose – The purpose of this paper is to investigate the optimal allocation of authority within “chain” organizations and to show when partial centralization becomes dominant in the sense of organizational performance. Design/methodology/approach – This paper takes an incomplete contract approach and uses an information transmission framework to investigate the optimal governance structure, in which non‐contractible decisions must be adapted to local operating conditions, and also coordinated with the upstream and downstream divisions. We also use simulation analysis to numerically show the theoretical mapping between the underlying parameters (i.e. coordination need) and the dominant organizational structures. Findings – Partial decentralization will arise as the optimal governance structure only when the information in the middle branch is relatively concentrated or dispersive, so as to exploit the underlying information structure in the “chain” organizations. Specifically, when information is highly concentrated, direct control of the middle branch can improve coordination within firms. When the information is highly dispersive, to delegate authority to the middle branch only can improve communication. Originality/value – This paper characterizes the optimal governance structure in “chain” organizations. The findings may give some enlightenment on real authority driven by ex ante asymmetric information structures and have implications on asymmetric delegation within firms.
Nankai Business Review International – Emerald Publishing
Published: May 27, 2014
Keywords: Communication; Adaptation; Coordination; Chain organizations; Partial centralization
Read and print from thousands of top scholarly journals.
Already have an account? Log in
Bookmark this article. You can see your Bookmarks on your DeepDyve Library.
To save an article, log in first, or sign up for a DeepDyve account if you don’t already have one.
Copy and paste the desired citation format or use the link below to download a file formatted for EndNote
Access the full text.
Sign up today, get DeepDyve free for 14 days.
All DeepDyve websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.