EconPapers    
Economics at your fingertips  
 

A note on the impact of the internal organization on the accuracy of the information transmitted within the firm

Eduard Alonso‐Pauli and Lluis Bru
Authors registered in the RePEc Author Service: Eduard Alonso-Pauli ()

Managerial and Decision Economics, 2020, vol. 41, issue 6, 902-910

Abstract: We investigate the incentives of sales managers to transmit information on demand conditions to headquarters under different organizational structures and its subsequent impact on firm performance. When headquarters determine quantities of production, sales managers' interests are aligned with that of the firm, and reliable information is transmitted. On the other hand, when the authority of decision making on quantities of production is delegated to sales managers, they prefer not to transmit reliable information; consequently, headquarters set transfer prices given poor information about demand. Due to such difference in the quality of the information available to headquarters, a centralized organizational structure frequently leads to the best performance.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1002/mde.3146

Related works:
Working Paper: A note on the impact of the internal organization on the accuracy of the information transmitted within the firm (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:41:y:2020:i:6:p:902-910

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2022-06-21
Handle: RePEc:wly:mgtdec:v:41:y:2020:i:6:p:902-910