Environmental Liability and Organizational Structure

This paper presents a multitask principal-agent model to examine how environmental liability rules for individual managers within a corporate hierarchy affect, on the one hand, the incentive schemes the organization provides and, on the other hand, the choice between a functional or a product-based organizational structure. If managers are risk neutral, a product-based organization dominates a functional organization and allows to obtain first-best effort level. If, moreover, there are no diseconomies of span, both organizational forms are equivalent. It is also shown that for the dominant function, effort levels are higher in a product-based organization than in a functional one. With risk averse managers, no organizational structure dominates the other in general, but we are able to identify under which conditions it does not matter who is held liable for environmental damages.contracts, liability, firm structure, principal-agent

Organizational Structure and Product Market Competition

We analyze an interaction between a firm’s choice of organizational structure and competition in the product-market. Two organizational structures are considered, namely a centralized-organization, whereby formal authority is retained by a principal, and a decentralized-organization, whereby formal authority is delegated to an agent. We show that the choice of organizational structure hinges on a trade-off between operating-profit and managerial effort. The principal may prefer to choose an organizational structure that generates lower operating-profit to motivate the agent to work hard. The choice of organizational structure may also determine whether the rival is active in the market or forced to exit the market.Formal and Real Authority, Delegation Structure, Product Market Competition

KWM: Knowledge-based Workflow Model for agile organization

The workflow management system (WFMS) in an agile organization should be highly adaptable to the frequent organizational changes. To increase the adaptability of contemporary WFMSs, a mechanism for managing changes within the organizational structure and changes in business rules needs to be reinforced. In this paper, a knowledge-based approach for workflow modeling is proposed, in which a workflow is defined as a set of business rules. Knowledge on the organizational structure and special workflow, such as role/actor mappings and complex routing rules, can be explicitly modeled in KWM (Knowledge-based Workflow Model). Using knowledge representation scheme and dependency management facility, a change propagation mechanism is provided to adapt to the frequent changes in the organizational structure, business rules, and procedures

ORGANIZATIONAL STRUCTURE IN PROCESS-BASED ORGANIZATIONS

This paper investigates the role of the organization structure in process-based organizations. We argue that companies cannot be designed upon organizational processes only or that process management can be simply imposed as an additional structural dimension on top of the existing functional or product dimension. It is more promising to consider process-based companies as organizations with a multidimensional structure with process ownership as a dominant dimension. The paper focuses on a number of consequences of the implementation of process-based organization structures. First, the complementary role of different types of processes is clarified. Second, we focus on the question how processes can be translated into the design of organizational units. Two key ideas underpin a process-based organizational structure. First, organizational units are organized around core processes. Second, other processes are added to these units minimizing the necessity of cross-unit coordination. This has several implications for planning and control activities and the way how process-based business units fit together to create a performing corporation. The latter can no longer be conceived within the traditional strategy- structure paradigm because of the fundamentally different role of middle and top managers.management and organization theory ;

Distance, Bank Organizational Structure and Credit

We survey the extant literature on the effects of both a bank’s organizational structure and the physical distance separating it from the lender on lending decisions. Banks do engage in spatial pricing, where the underlying mechanism can be both transportation costs and information asymmetries. Moreover, their ability to discriminate is bounded by the reach of the lending technology of surrounding competitors. It is not entirely clear from an empirical viewpoint that small, decentralized banks have a comparative advantage in relationship lending. Differences in data and methodology may explain these mixed findings. If it does exist, this advantage can be motivated theoretically by the existence of agency and communication costs within a bank.financial intermediation;distance;organizations;loan rates;collateral

Reit Organizational Structure and Operating Characteristics

As a corporate organizational form, real estate investment trusts (REITs) fall into two competing property management structures: internally advised and externally advised. This study tests the hypothesis that, due to their superior ability to resolve conflicts of interests between REIT management and shareholders, internally-advised REITs will dominate the externally-advised REITs. We also test the hypothesis that larger REITs will come to dominate the market and find support for this hypothesis. The results confirm that externally-advised REITs are responding to market pressure to conform to the performance standards set by newer, internally-advised REITs.

Multibank holding company organizational structure and performance

A study of how quantitative measures of the organizational centralization of 62 multibank holding companies relate to holding company profitability.Bank holding companies ; Banking structure