Delegation within Hierarchies: How Information Processing and Knowledge Characteristics Influence the Allocation of Formal and Real Decision Authority
Dobrajska, Magda, Stephan Billinger and Samina Karim. “Delegation within hierarchies: How information processing and knowledge characteristics influence the allocation of formal and real decision authority.” Organization Science 26(3): 687-704, 2015
37 Pages Posted: 25 Apr 2012 Last revised: 17 Jun 2016
Date Written: 2015
We investigate tradeoffs associated with delegating authority over multiple interrelated decisions in a complex task structure. The empirical setting is a business process of a global Fortune 50 firm. The firm decentralized its organization and redefined decision authority across organizational hierarchies between 2008 and 2011. We employ regression analysis of micro-level data on the allocation of decision authority between formal and real authority, and further on the organization design of 761 decision tasks within a hierarchy. Our findings show how the specialization of decision-relevant knowledge, the matching of required knowledge and managers’ expertise, and information processing intensity affect (a) the occurrence of delegation, and (b), if delegation occurs, how far down the organizational hierarchy authority is delegated. We discuss how these findings complement existing theories on delegation by providing insights into when and how interrelated decisions are delegated across multiple levels of an organizational hierarchy.
Keywords: Delegation, decentralization, decision making, formal and real authority, hierarchy, information processing, knowledge based view, organization design
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