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Divisionalization, Decentralization And Performance Of Large United Kingdom Companies 1

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  • C. W. L. Hill
  • J. F. Pickering

Abstract

Questionnaire survey data from 144 large U.K. firms are used to describe and discuss the nature of organization design in major companies. It was found that the majority of firms were multidivisional. However a considerable variation in internal operating procedures was found which emphasized that many multidivisional companies do not behave in the way that the strategy/structure literature predicts. Empirical testing of the relation between structure and financial performance also emphasizes that divisionalization is not necessarily the key to a superior profit performance. Rather it would appear that organizational procedures need to be reconsidered in the light of recent divisional structures established in many companies. It is argued that a powerful divisional head office may weaken overall performance and that instead greater attention should be paid to the opportunity to decentralize operating decisions to the individual business units within each division.

Suggested Citation

  • C. W. L. Hill & J. F. Pickering, 1986. "Divisionalization, Decentralization And Performance Of Large United Kingdom Companies 1," Journal of Management Studies, Wiley Blackwell, vol. 23(1), pages 26-50, January.
    • Handle: RePEc:bla:jomstd:v:23:y:1986:i:1:p:26-50
    DOI: 10.1111/j.1467-6486.1986.tb00933.x
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    Cited by:

    1. Dooms, E., 2005. "Control in multidivisional firms : Levels issues and internal differentiation," Other publications TiSEM bc7c1906-d54c-46e5-9d8e-1, Tilburg University, School of Economics and Management.
    2. Vachani, Sushil, 1999. "Global diversification's effect on multinational subsidiaries' autonomy," International Business Review, Elsevier, vol. 8(5-6), pages 535-560, October.
    3. Bonache, Jaime & Fernández, Zulima, 1996. "Expatriate compesation and its link to subsidiary strategic role : a theoretical analysis," DEE - Working Papers. Business Economics. WB 6017, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.

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