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Business environment, managerial strategies, and the allocation of decision-making authorities in Swiss Firms

Author

Listed:
  • Beckmann, Michael

    (University of Basel)

  • Armbruster, Kathrin

    (University of Basel)

Abstract

The allocation of decision-making authorities may be seen as the last link in a causal relationship starting from changes in environment and continuing to business strategy. Changes in task complexity, which can be measured by the introduction of a diversification or an outsourcing strategy, are expected to result in a shift towards a more centralized or decentralized allocation of decision-making authorities. Using nationally representative Swiss firm data, OLS, Propensity Score Matching as well as a combined matching and difference-in-differences approach in order to account for endogeneity and unobserved heterogeneity are applied. Estimates using all three approaches show a highly significant positive impact of outsourcing on a decentralized decision rights assignment, whereas a diversification strategy yields no influence. The conclusion therefore is that a lower delegation risk due to a decline in complexity results in decentralized decision-making authorities in Swiss firms.

Suggested Citation

  • Beckmann, Michael & Armbruster, Kathrin, 2010. "Business environment, managerial strategies, and the allocation of decision-making authorities in Swiss Firms," Working papers 2010/06, Faculty of Business and Economics - University of Basel.
    • Handle: RePEc:bsl:wpaper:2010/06
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    More about this item

    Keywords

    Allocation of decision-making authorities - Diversification - Outsourcing - Average treatment effect; propensity score matching estimators; combined matching difference-in-differences estimator;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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