ORGANIZATIONAL DESIGN, ORGANIZATIONAL LEARNING, AND THE MARKET VALUE OF THE FIRM
Author(s)Carroll, Timothy N.; Hunter, Starling D.
We compare market returns associated with firms' creation of new units focused on e-business. Two aspects of organization design - governance and leadership - are considered with regard to exploitation - and exploration-oriented organization learning. We find that exploitation in governance (high centralization) is associated with a lower mean and variance in returns; that exploitation in leadership (appointment of outsiders) is associated with the same mean yet higher variance; and, among units exhibiting both modes of learning, the variance of returns are not equal.
MIT Sloan School of Management Working Paper4563-05
e-business, corporate governance, leadership, exploitation