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| Author: | Knott, A. M. |
| Title: | The Dynamic Value of Hierarchy |
| Journal: | Management Science
2001 : MAR, VOL. 47:3, p. 430-448 |
| Index terms: | HIERARCHICAL ORGANIZATIONS MANAGEMENT MANAGERS |
| Language: | eng |
| Abstract: | This study develops a dual-routines view of the dynamic value of hierarchy, and tests it against the implicit null hypothesis that hierarchy merely provides static advantages over markets. The view holds that hierarchical managers perform two roles that create value for firms in perpetuity - an administrative role of enforcing operational routine, and an entrepreneurial role of executing a metaroutine that continually revises operational routine to keep pace with changes in the environment. The test consists of a natural experiment comparing the behavior and performance of establishments that leave a franchise, "lose their hierarchical managers," with those that remain. The author finds support for the view. |
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