Strategic delegation of responsibility in competing firms

P.W.J. de Bijl

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Abstract

This paper investigates the strategic impact of organizational design on product market competition. In a duopoly model of horizontal and vertical product differentiation, each firm's manager can impose a product location, or delegate responsibility to select product location to his subordinate. The task of a subordinate is to develop and produce the good. Quality is determined by his effort level, which depends on his private benefits. The managers compete on a product market by selling the goods produced by their subordinates. Conditions for existence of equilibria are derived, and implications for management strategy are discussed
Original languageEnglish
PublisherUnknown Publisher
Number of pages25
Volume1995-33
Publication statusPublished - 1995

Publication series

NameCentER Discussion Paper
Volume1995-33

Keywords

  • Oligopoly
  • Competition
  • Product Differentiation
  • Organizational Structure
  • Corporate Strategy
  • business economics

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