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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26444
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| Title: | Distributional Conflict in Organizations |
| Authors: | Inderst, Roman
Muller, Holger M.
Warneryd, Karl |
| Keywords: | Hierarchy
conflict
influence activities
U-form vs. M-form |
| Issue Date: | Feb-2002 |
| Series/Report no.: | FIN-02-010 |
| Abstract: | Hierarchy can function as an instrument to channel influence activities
or power struggles in organizations. Contrary to what has frequently
been argued, we show that multi-divisional organizations may involve
lower influence costs than single-tier organizations, even though they
offer more scope for organizational conflict and have more executives
that can be influenced. These benefits derive from two effects. First,
part of the conflict in multi-divisional organizations takes place on
the division level, where a small number of agents fight over only a
fraction of the overall prize. Second, by grouping agents into common
divisions, multi divisional organizations create free-rider problems in
rent-seeking. We apply our framework to divestitures and the transition
from the U- to the M-form by US corporations in the 1920s. |
| URI: | http://hdl.handle.net/2451/26444 |
| Appears in Collections: | Finance Working Papers
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