Information technology and organization design: locating decisions and information
Article Abstract:
A study was conducted to determine the effects of information technology (IT) on the profitability of individual organization designs and on the comparative profitability of various organization designs. The problem involved a central authority and a network of nodes that engage in two types of complementary investments, namely, one centralized investment and several decentralized investments. The investigation also looked at three different organization designs: hierarchy, market and mixed mode. The analysis revealed underinvestment, compared to first-best in all three organization designs, as a result of the complementarities between global and local investment. Moreover, findings showed that this underinvestment can be addressed through IT, by imparting information to the decisionmaker or by reorganizing the monitoring and incentive structure. Other findings are discussed.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1998
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Entry and learning
Article Abstract:
The impact of learning and the pressures of competitive entry on prices and production costs in commodity markets are discussed. The entry of new competitors will have a significant effect over time on price patterns and cost movements. Entry alone can generate cost and price declines which appear to be learning-induced reductions if firms possess U-shaped average cost curves. Even when learning is strong, cost increases can occur. The implications of this research for managers is that managers must give more emphasis to the effect of cost on day-to-day decisions.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1987
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Rethinking the product portfolio: a generalized investment model
Article Abstract:
A generalized financial-product portfolio concept is developed that is based on underlying economic factors determining risk and product profitability. Applications involve a company's investment decisions. The developed model offers a way to tell the difference between market-related risk and return from product return and firm-specific risk. A description is offered of two hypothetical illustrations of the model, with discussion of managerial implications also offered.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1988
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