European Management Journal
AbstractThis paper is devoted to the pattern of activity within large companies, through the two criteria of decentralization and contracting out. Our goal is to understand whether the determinants are identical for both internal and external boundaries of the firm. One literature stream contributes to the analysis of the internal structure and organization of divisional companies, studying the functions assigned to headquarters or divisions. Another part of the literature has focused on the boundaries of the firm issues and the firm’s core activities. Few works are at the junction of these two traditions. This study builds on an empirical study dedicated to the book publishing industry. Our analysis leads to discuss determinants of internal and external borders. We show that functions or activities with high potential of economies of scale are mainly centralized and internalized. On reverse, those related to core business and non-programmable functions are mostly at divisional level and contracted out.
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Bibliographic InfoPaper provided by HEC Paris in its series Les Cahiers de Recherche with number 990.
Length: 34 pages
Date of creation: 01 Feb 2013
Date of revision:
Boundaries of the firm; Centralization; Contracting out; Central services;
Find related papers by JEL classification:
- G00 - Financial Economics - - General - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-09 (All new papers)
- NEP-BEC-2013-11-09 (Business Economics)
- NEP-HME-2013-11-09 (Heterodox Microeconomics)
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