Organizational Design, Organizational Learning, and the Market Value of the Firm
39 Pages Posted: 26 Oct 2005
Date Written: October 2005
Abstract
We compare market returns associated with firms' creation of new units focused on e-business. Two aspects of organization design - governance and leadership - are considered with regard to exploitation - and exploration-oriented organization learning. We find that exploitation in governance (high centralization) is associated with a lower mean and variance in returns; that exploitation in leadership (appointment of outsiders) is associated with the same mean yet higher variance; and, among units exhibiting both modes of learning, the variance of returns are not equal.
Keywords: e-business, corporate governance, leadership, exploitation
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