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Delegation of Authority In Business Organizations: An Empirical Test
Author(s) -
Colombo Massimo G.,
Delmastro Marco
Publication year - 2004
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/j.0022-1821.2004.00216.x
Subject(s) - delegation , test (biology) , product (mathematics) , affect (linguistics) , business , probit , probit model , ordered probit , industrial organization , microeconomics , power (physics) , economics , econometrics , management , mathematics , psychology , paleontology , geometry , physics , quantum mechanics , biology , communication
This paper tests the predictions of economic theory on the determinants of the allocation of decision‐making power through the estimates of ordered probit models with random effects. Our findings show that the complexity of plants' operations and organization, the characteristics of the communication technologies in use, the ownership status of plants and the product mix of their parent companies figure prominently in explaining whether authority is delegated to the plant manager or not. In addition, the nature of the decision under consideration turns out to affect the allocation of authority.