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Delegation of Authority In Business Organizations: An Empirical Test

Massimo G. Colombo and Marco Delmastro ()

Journal of Industrial Economics, 2004, vol. 52, issue 1, 53-80

Abstract: This paper tests the predictions of economic theory on the determinants of the allocation of decision‐making power through the estimates of ordered probit models with random effects. Our findings show that the complexity of plants' operations and organization, the characteristics of the communication technologies in use, the ownership status of plants and the product mix of their parent companies figure prominently in explaining whether authority is delegated to the plant manager or not. In addition, the nature of the decision under consideration turns out to affect the allocation of authority.

Date: 2004
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Journal of Industrial Economics is currently edited by Pierre Regibeau, Yeon-Koo Che, Kenneth Corts, Thomas Hubbard, Patrick Legros and Frank Verboven

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