Cookies?
Library Header Image
LSE Research Online LSE Library Services

Organizing to adapt and compete

Alonso, Ricardo, Dessein, Wouter and Matouschek, Niko (2015) Organizing to adapt and compete. American Economic Journal: Microeconomics, 7 (2). pp. 158-187. ISSN 1945-7669

[img]
Preview
PDF - Accepted Version
Download (524kB) | Preview

Identification Number: 10.1257/mic.20130100

Abstract

We examine the relationship between the organization of a multi-divisional firm and its ability to adapt production decisions to changes in the environment. We show that even if lower-level managers have superior information about local conditions, and incentive conflicts are negligible, a centralized organization can be better at adapting to local information than a decentralized one. As a result, and in contrast to what is commonly argued, an increase in product market competition that makes adaptation more important can favor centralization rather than decentralization.

Item Type: Article
Official URL: http://www.aeaweb.org/aej-micro/
Additional Information: © 2014 American Economic Association
Divisions: Management
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HE Transportation and Communications
JEL classification: D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production
Sets: Departments > Management
Research centres and groups > Managerial Economics and Strategy Group
Date Deposited: 05 Aug 2014 09:48
Last Modified: 20 Jun 2019 02:01
URI: http://eprints.lse.ac.uk/id/eprint/58647

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics