Jr. A computational model of a retail chain is developed in which store managers continually search for better practices.
Search takes place over a rugged landscape defined over the space of store practices.
The main objective of this research is to determine how the amount of discretion given to store managers, as to how they run their stores, influences the rate of innovation at the store level. We find that greater decentralization enhances firm performance when stores' markets are sufficiently different, the horizon is sufficiently long, and market are sufficiently stable. Decentralization, organization, innovation. Submitted to Management Science. Return to 2000 working papers list.