Decentralization of Decision Authority in Complex Task Structures: An empirical Investigation
Academy of Management Proceedings
We investigate tradeoffs associated with delegating authority over multiple interrelated decisions in a complex task structure. The empirical setting is a business process of a global Fortune 50 firm. The firm decentralized its organization and redefined decision authority across organizational hierarchies between 2008 and 2011. We employ regression analysis of micro-level data on the allocation of decision authority between formal and real authority and further on the organization design of
... zation design of 761 decision tasks within a hierarchy. Our findings show how the specialization of decision-relevant knowledge, the matching of required knowledge and managers' expertise, and information processing intensity affect (a) the occurrence of delegation, and (b), if delegation occurs, how far down the organizational hierarchy authority is delegated. We discuss how these findings complement existing theories on delegation by providing insights into how multiple interrelated decisions are delegated within a complex task structure.