Organizational Design, Organizational Learning, and the Market Value of the Firm

39 Pages Posted: 26 Oct 2005

See all articles by Tim Carroll

Tim Carroll

Georgia Institute of Technology - Organizational Behavior Area

Starling David Hunter

Carnegie Mellon University

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

Suggested Citation

Carroll, Tim and Hunter, Starling David, Organizational Design, Organizational Learning, and the Market Value of the Firm (October 2005). MIT Sloan Research Paper No. 4563-05, Available at SSRN: https://ssrn.com/abstract=829006 or http://dx.doi.org/10.2139/ssrn.829006

Tim Carroll

Georgia Institute of Technology - Organizational Behavior Area ( email )

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Starling David Hunter (Contact Author)

Carnegie Mellon University ( email )

5032 Forbes Ave.
Qatar Office SMC 1070
Pittsburgh, PA 15289
United States

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