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Organizational Structure and Managerial Decisions

Author

Listed:
  • Paul Legerer
  • Thomas Pfeiffer
  • Georg Schneider
  • Joachim Wagner

Abstract

We investigate how the organizational structure of a firm influences the decision making of its top management. Different organizational structures lead information to be processed in different ways by the individual decision makers, potentially creating an informational cascade within the organization. We analyze two organizational structures: the first inducing sequential information processing, the second inducing batch information processing. In particular, we characterize the optimal organizational structure using the signal precision of the top manager, i.e., the value of his private information.

Suggested Citation

  • Paul Legerer & Thomas Pfeiffer & Georg Schneider & Joachim Wagner, 2009. "Organizational Structure and Managerial Decisions," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 16(2), pages 147-159.
  • Handle: RePEc:taf:ijecbs:v:16:y:2009:i:2:p:147-159 DOI: 10.1080/13571510902917483
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    References listed on IDEAS

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