Decentralization, Interdependence and Performance Measurement System Design: Sequences and Priorities
AbstractWe investigate the determinants of decentralization and performance measurement choices in multidivisional firms.We extend the research on the economics of organizational design choices by examining the impact of two important determinants of those choices, namely, subunit interdependencies and knowledge transfer costs.We test our predictions with a simultaneous equation model that captures the endogenous choices relating to the level of decentralization and the use of alternative subunit performance measures using data collected from 78 business units.Our findings are generally consistent with our predictions.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2001-28.
Date of creation: 2001
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performance measurement; interdependency; knowledge; decentralization; organizational structure;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executives; Executive Compensation
- M4 - Business Administration and Business Economics; Marketing; Accounting - - Accounting
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-05-16 (All new papers)
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