Abstract

http://ssrn.com/abstract=1802635
 


 



Delegation in Multi-Establishment Firms: Evidence from I.T. Purchasing


Kristina Steffenson McElheran


Harvard University - Technology & Operations Management Unit

January 30, 2013

Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 11-101

Abstract:     
Recent contributions to a growing theory literature have focused on the tradeoff between adaptation and coordination in determining delegation within firms. Empirical evidence, however, is limited. Using establishment-level data on decision rights over information technology investments, I find that a high net value of adaptation is strongly associated with delegation, as are local information advantages and firm-wide diversification; in contrast, a high net value of within-firm coordination is correlated with centralization. Variation across establishments within firms is widespread: most firms are neither fully centralized nor fully decentralized. Delegation patterns are largely consistent with standard team-theory predictions; however, certain findings, such as a negative correlation between delegation and firm size, call for a consideration of agency costs, as well.

Number of Pages in PDF File: 53

JEL Classification: L22, D22, M15, M2

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Date posted: April 5, 2011 ; Last revised: February 1, 2013

Suggested Citation

McElheran, Kristina Steffenson, Delegation in Multi-Establishment Firms: Evidence from I.T. Purchasing (January 30, 2013). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 11-101. Available at SSRN: http://ssrn.com/abstract=1802635 or http://dx.doi.org/10.2139/ssrn.1802635

Contact Information

Kristina Steffenson McElheran (Contact Author)
Harvard University - Technology & Operations Management Unit ( email )
Boston, MA 02163
United States
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