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| Author: | Kouvelis, P. Lariviere, M. A. |
| Title: | Decentralizing cross-functional decisions: coordination through internal markets |
| Journal: | Management Science
2000 : AUG, VOL. 46:8, p. 1049-1058 |
| Index terms: | DECENTRALISATION DECISION MAKING INCENTIVES INTERNAL MARKETS |
| Language: | eng |
| Abstract: | A firm faces many problems that are inherently cross-functional. To solve them successfully requires the coordinated actions of many functional representatives acting in a decentralized setting. Functional managers, however, respond to their own individual incentives and may consequently fail to maximize the overall profits of the firm. The authors examine this issue in a setting in which the output of early actions limits the range of later actions, and they propose an incentive scheme that allows the system to be successfully decentralized. |
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