The Quality of Managers in Centralized Versus Decentralized Organizations
Author | : Raaj Kumar Sah |
Publisher | : |
Total Pages | : 0 |
Release | : 2012 |
ISBN-10 | : OCLC:1375262338 |
ISBN-13 | : |
Rating | : 4/5 (38 Downloads) |
Book excerpt: This paper examines the dynamic consequences of a greater centralization or decentralization of the decision-making authority to appoint successor managers on the quality of managers actually appointed. Our main result is that a greater centralization results in a greater variability over time in the quality of managers. An intuitive reason for this is that though a highly capable manager may have large beneficial effects on the managerial choices within a centralized system, because this manager has greater authority in such a system, a highly incapable manager placed in the same position has correspondingly large deleterious effects.