Decentralized Business Strategies in a Multi-Unit Firm

Myong-Hun Chang () and Joseph Harrington ()

Economics Working Paper Archive from The Johns Hopkins University,Department of Economics

Abstract: In a multi-unit firm such as a retail chain or a multi-plant manufacturer we compare the business strategies developed by unit managers with the strategies that maximize corporate profit The setting is one in which units face different markets and where learning spillovers between two units are enhanced if their strategies are more similar When there is a small number of units we find a tendency for managers' strategies to be excessively tailored to their local market When the firm has many units unit strategies can be either excessively or insufficiently standardized

Date: 1998-11, Revised 1999-08
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Journal Article: Decentralized Business Strategies in a Multi-Unit Firm (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:jhu:papers:418

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