search query: @indexterm coordination / total: 38
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| Author: | Rawley, E. |
| Title: | Diversification, coordination costs, and organizational rigidity: evidence from microdata |
| Journal: | Strategic Management Journal
2010 : AUG, VOL. 31:8, p. 873-891 |
| Index terms: | USA companies transport organizations diversification productivity coordination costs |
| Freeterms: | rigidity |
| Language: | eng |
| Abstract: | This paper explores the impact of coordination costs (hereafter as: co-costs) and organizational rigidity (as: org-rgdty) on the returns to diversification with the key thesis being that co-costs offset economies of scope (herein as: e-of-s.), whereas org-rgdty increases co-costs, further constraining e-of-s. Using novel data from the Economic Census on taxicab and limousine firms, the empirical tests of this proposition identify the effects of coordination and org-rgdty costs on business unit and firm productivity. It is shown that coordination and org-rgdty costs are economically and statistically significant, while org-rgdty itself accounts for a 16 percent decrease in paid ride-miles per taxicab in incumbent diversifiers. It is suggested that co-costs, in general, and org-rgdty costs, especially, limit the scope of the firm. |
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