 Information uncertainty and organizational designElia Ferracuti Journal of Accounting and Economics, 2022, vol. 74, issue 1 Abstract: This paper investigates how information uncertainty, measured through variation in the informativeness of the public information environment, shapes the organizational design choices of firms. I posit that, when faced with higher uncertainty about demand and supply, managers are more likely to establish links to customer/supplier industries through high-level hiring decisions and vertical integration, thereby facilitating access to information about these industries. Consistent with this hypothesis, I find that firms modify their hiring and, to a lesser extent, vertical integration decisions in response to variation in the informativeness of the public information environment about demand and supply, measured with two distinct empirical approaches. Further, I observe that these organizational design choices correlate with the efficiency of inventory management and investment sensitivity to growth opportunities; this finding is consistent with organizational design facilitating access to information otherwise unavailable to managers through public sources. Keywords: Information uncertainty; Management accounting; Organizational design (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:74:y:2022:i:1:s0165410122000167 DOI: 10.1016/j.jacceco.2022.101493 Access Statistics for this article Journal of Accounting and Economics is currently edited by J. L. Zimmerman, S. P. Kothari, T. Z. Lys and R. L. Watts More articles in Journal of Accounting and Economics from Elsevier |
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