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Distributional Conflict in Organisations Author info | Abstract | Publisher info | Download info | Related research | Statistics Inderst, Roman
Mueller, Holger M
Wärneryd, Karl
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Hierarchy can function as an instrument to channel influence activities or power struggles in organizations. Contrary to what has frequently been argued, we show that multi-divisional organizations may involve lower influence costs than single-tier organizations, even though they offer more scope for organizational conflict and have more executives that can be influenced. These benefits derive from two effects. First, part of the conflict in multi-divisional organizations takes place on the division level, where a small number of agents fight over only a fraction of the overall prize. Second, by grouping agents into common divisions, multi-divisional organizations create free-rider problems in rent seeking. We apply our framework to divestitures and the transition from the U- to the M-form by US corporations in the 1920s.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
3315.
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Date of creation: Apr 2002Date of revision:
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Keywords: conflict ; hierarchy ; influence activities ; U-form versus M-form ; Other versions of this item:
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Investment Policy G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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