Abstract
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.
Original language | English |
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Title of host publication | Proceedings of the 56th Annual Meeting of the Academy of International Business : Local Contexts in Global Business |
Editors | Klaus Meyer, Tunga Kiyak |
Place of Publication | East Lansing, MI |
Publisher | Academy of International Business |
Publication date | 2014 |
Pages | 13 |
Publication status | Published - 2014 |
Event | AIB 2014 Annual Meeting : Local Context in Global Business - Westin Bayshore, Vancouver, Canada Duration: 23 Jun 2014 → 26 Jun 2014 Conference number: 56 http://aib.msu.edu/events/2014/ |
Conference
Conference | AIB 2014 Annual Meeting |
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Number | 56 |
Location | Westin Bayshore |
Country/Territory | Canada |
City | Vancouver |
Period | 23/06/2014 → 26/06/2014 |
Internet address |
Series | Academy of International Business. Annual Meeting. Proceedings |
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Volume | 56 |
ISSN | 2078-4430 |