Strategic Resource Allocation: Top-Down, Bottom-Up, and the Value of Strategic Buckets

• 成果类型: Article
• 署名作者: Hutchison-Krupat, Jeremy; Kavadias, Stylianos
• 署名单位: University of Virginia; University of Cambridge
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2013.1861
• 发表日期: 2015
• 页码: 391-412
• 关键词: resource allocation processes; strategic buckets; empowerment; innovation strategy; new product development strategy; Corporate culture

摘要

When senior managers make the critical decision of whether to assign resources to a strategic initiative, they have less precise initiative-specific information than project managers who execute such initiatives. Senior management chooses between a decision process that dictates the resource level ( top-down) and one that delegates the resource decision and gives up control in favor of more precise information ( bottom-up). We investigate this choice and vary the amount of information asymmetry between stakeholders, the penalty for failure imposed upon project managers, and how challenging the initiative is for the firm. We find that no single decision process is the best. Bottom-up processes are beneficial for more challenging initiatives. Increased organizational penalties may prompt the firm to choose a narrower scope and deter the approval of profitable initiatives. Such penalties, however, enable an effective decision process known as strategic buckets that holds the potential to achieve first-best resource allocation levels.