Organizational Architecture and Corporate Finance

Posted: 14 May 2001

See all articles by Clifford W. Smith

Clifford W. Smith

Simon Graduate School of Business, University of Rochester

Abstract

I discuss the relation between corporate finance and organizational architecture. In a recent book, Managerial Economics and Organizational Architecture (2001), my co-authors Jim Brickley and Jerry Zimmerman and I provide a systematic framework for analyzing organizational problems and structuring more effective organizations. We apply the term organizational architecture to three key aspects of the firm: (1) assignment of decision rights, (2) structure of systems to evaluate individuals and business units, and (3) the methods of rewarding individuals. In this article I illustrate how corporate financing activities should be coherent with the broader organizational architecture of the firm.

I highlight several pedagogical insights using leasing as an example.

JEL Classification: G30, G32

Suggested Citation

Smith, Clifford W., Organizational Architecture and Corporate Finance. The Journal of Financial Research. Available at SSRN: https://ssrn.com/abstract=255114

Clifford W. Smith (Contact Author)

Simon Graduate School of Business, University of Rochester ( email )

Carol Simon Hall 3-202C
Rochester, NY 14627
United States
585-275-3217 (Phone)
585-442-6323 (Fax)

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