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

See all articles by Magdalena Dobrajska

Magdalena Dobrajska

Copenhagen Business School

Stephan Billinger

University of Southern Denmark - Department of Marketing & Management

Samina Karim

Northeastern University

Date Written: 2015

Abstract

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

Suggested Citation

Dobrajska, Magdalena and Billinger, Stephan and Karim, Samina, Delegation within Hierarchies: How Information Processing and Knowledge Characteristics Influence the Allocation of Formal and Real Decision Authority (2015). 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, Available at SSRN: https://ssrn.com/abstract=2045399 or http://dx.doi.org/10.2139/ssrn.2045399

Magdalena Dobrajska

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Stephan Billinger

University of Southern Denmark - Department of Marketing & Management ( email )

Strategic Organization Design unit (SOD)
Campusvej 55
Odense
Denmark
+45 6550 3187 (Phone)

HOME PAGE: http://www.sam.sdu.dk/staff/sbi

Samina Karim (Contact Author)

Northeastern University ( email )

Boston, MA 02115
United States

HOME PAGE: http://www.damore-mckim.northeastern.edu/faculty/k/karim-samina/

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