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Implications of internal organization structure for firm boundaries
Author(s) -
Weigelt Carmen,
Miller Douglas J.
Publication year - 2013
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.2074
Subject(s) - corporate governance , autonomy , business , industrial organization , empirical research , empirical evidence , task (project management) , knowledge management , microeconomics , economics , management , finance , computer science , philosophy , epistemology , political science , law
Knowledge issues are central to governance choice. Organization structure influences knowledge flows and costs of knowledge creation and exchange inside the firm. Yet the question of how a firm's internal structure affects its governance choice for new activities has received scant empirical attention. We examine the role of internal structure, specifically unit autonomy and lateral coordination, in a firm's governance decision for new, knowledge‐intensive activities. The findings show that internal structure is a ‘shift parameter’ that affects governance choice by moderating the relationship between task complexity and degree of integration. The empirical setting is the U.S. banking industry and its adoption of Internet banking . Copyright © 2013 John Wiley & Sons, Ltd.