Specific knowledge, investment decision and organizational architecture

Ghazi Zouari
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Ghazi Zouari: Fseg Sfax, LEG-Fargo

Working Papers CREGO from Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations

Abstract: Within the theoretical framework of organizational architecture, this paper attempts to explain the decentralization of investment decision. To do so, it highlights the role of the allocation of decision rights and control as a factor explaining the effectiveness of investment management. Thus, the object of this research is, first, to strengthen the relevance of the theoretical corpus of Fama and Jensen (1983a, 1983b) and Jensen and Meckling (1992), and, secondly, to replicate the studies by Noda and Bower (1996), Fahmi (1999) and Catelin (2001) and extend them to the Tunisian context. The Tunisian example is relevant because of the lack of research on the topic for this country, and also because this research could improve decision making for investment in the current context of Tunisia. We show that the role played by organizational complexity, information and communication technology, training programs, and evaluation and incentive systems in the creation of value requires the setting of a centralized organizational structure. An empirical test was conducted on a sample of 63 Tunisian firms by using canonical analysis. This test allowed the validation of four out of the five tested hypotheses.

Keywords: investment decision; organizational architecture (decisional rights, control system). (search for similar items in EconPapers)
JEL-codes: G30 G31 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2011-05
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Citations: View citations in EconPapers (1)

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