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Organizational Design, Organizational Learning, And The Market Value Of The Firm

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  • Carroll, Timothy N.
  • Hunter, Starling D.

Abstract

We compare market returns associated with firms' creation of new units focused on e-business. Two aspects of organization design - governance and leadership - are considered with regard to exploitation - and exploration-oriented organization learning. We find that exploitation in governance (high centralization) is associated with a lower mean and variance in returns; that exploitation in leadership (appointment of outsiders) is associated with the same mean yet higher variance; and, among units exhibiting both modes of learning, the variance of returns are not equal.

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  • Carroll, Timothy N. & Hunter, Starling D., 2006. "Organizational Design, Organizational Learning, And The Market Value Of The Firm," Working papers 30608, Massachusetts Institute of Technology (MIT), Sloan School of Management.
  • Handle: RePEc:mit:sloanp:30608
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    File URL: http://hdl.handle.net/1721.1/30608
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    References listed on IDEAS

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    1. Milton Harris & Artur Raviv, 2002. "Organization Design," Management Science, INFORMS, vol. 48(7), pages 852-865, July.
    2. Fama, Eugene F, et al, 1969. "The Adjustment of Stock Prices to New Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(1), pages 1-21, February.
    3. Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
    4. Jeroen Weesie, 1998. "Regression analysis with multiplicative heteroscedasticity," Stata Technical Bulletin, StataCorp LP, vol. 7(42).
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    Keywords

    e-business; corporate governance; leadership; exploitation;

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