Delegation in multi-establishment firms
Subtitle: evidence from I.T. purchasing
By: Kristina McElheran
Contributors: Harvard Business School
Edition: Revised edition
Series: Working paper / Harvard Business School -- 11-101; Working paper (Harvard Business School) -- 11-101
Publisher: Harvard Business School
Published: 2013
Place of publication: Boston]
Language: eng
Number of pages: 51
Description: Recent contributions to a growing theory literature have focused on the tradeoff between adaptation and coordination in determining delegation within firms. Empirical evidence, however, is limited. Using establishment-level data on decision rights over information technology investments, I find that a high net value of adaptation is strongly associated with delegation, as are local information advantages and firm-wide diversification; in contrast, a high net value of within-firm coordination is correlated with centralization. Variation across establishments within firms is widespread: most firms are neither fully centralized nor fully decentralized. Delegation patterns are largely consistent with standard team-theory predictions; however, certain findings, such as a negative correlation between delegation and firm size, call for a consideration of agency costs, as well.
Notes: "April 2011. (Revised April 2012, July 2012, January 2013.)" -- Publisher's website.

Includes bibliographical references (pages 37-41).