Integration, organizational processes, and allocation of resources

• 成果类型: Article
• 署名作者: Ozbas, O
• 署名单位: University of Southern California
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2004.01.003
• 发表日期: 2005
• 页码: 201-242
• 关键词: integration; strategic communication; allocation of resources

摘要

Does the level of integration of a firm affect the quality of information available to its top decision makers responsible for allocating resources? Motivated by the pervasiveness of specific knowledge in large multi-division firms, I develop a model of internal competition for corporate resources among specialist managers and show that: (i) managers of integrated firms exaggerate the payoffs of their projects to obtain resources despite potentially adverse career consequences, and (ii) the exaggeration problem worsens with increased integration and reduces the allocative efficiency of an integrated firm. Control rights based on asset ownership enable the firm to set the rules of the game and improve managerial behavior through organizational processes such as rigid capital budgets, job rotation, centralization and hierarchies. (C) 2004 Elsevier B.V. All rights reserved.