Logo Logo

Organizing to Adapt and Compete, American Economic Journal: Microeconomics

Abstract

We examine the relationship between the organization of a multi-divisional Örm and its ability to adapt production decisions to changes in the environment. We show that even if lower-level managers have superior information about local conditions, and incentive conáicts are negligible, a centralized organization can be better at adapting to local information than a decentralized one. As a result, and in contrast to what is commonly argued, an increase in product market competition that makes adaptation more important can favor centralization rather than decentralization.

Type

Article

Author(s)

Niko Matouschek, Wouter Dessein, Ricardo Alonso

Date Published

2015

Citations

Matouschek, Niko, Wouter Dessein, and Ricardo Alonso. 2015. Organizing to Adapt and Compete. American Economic Journal: Microeconomics.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more