How Firms Make Boundary Decisions: The Role of Hierarchy Span and Expertise Span

Magdalena Dobrajska, Stephan Billinger, Markus Becker

    Publikation: Bidrag til bog/antologi/rapportKonferenceabstrakt i proceedingsForskningpeer review


    We report findings from an analysis of 234 firm boundary decisions that a manufacturing firm has made during a 10 year period. Extensive interviews with all major decision makers located both at the headquarters and subsidiaries allow us to examine (a) who was involved in each boundary decision, and (b) how the firm arrived at a particular transactional choice in each decision. We find that decision makers extensively adapt decision structures in order to effectively make governance mode choices. They adapt hierarchy span, i.e. the number of hierarchical levels involved, and expertise span, i.e. the number of same-level decision makers with dissimilar knowledge basis. We observe that decision makers heavily rely on varying hierarchy and expertise span in order to improve the quality of the decision outcome. Central to the adaption of decision structures is that decision makers, over time and as novelty decreases, substitute hierarchy span with expertise span. We conclude that this substitution mechanism is core for our understanding of how decision structures are used when firms attempt to achieve transactional alignment.
    TitelProceedings of the 56th Annual Meeting of the Academy of International Business : Local Contexts in Global Business
    RedaktørerKlaus Meyer, Tunga Kiyak
    UdgivelsesstedEast Lansing, MI
    ForlagAcademy of International Business
    StatusUdgivet - 2014
    BegivenhedAIB 2014 Annual Meeting : Local Context in Global Business - Westin Bayshore, Vancouver, Canada
    Varighed: 23 jun. 201426 jun. 2014
    Konferencens nummer: 56


    KonferenceAIB 2014 Annual Meeting
    LokationWestin Bayshore
    NavnAcademy of International Business. Annual Meeting. Proceedings