A Neglected Role for Organizational Design: Supporting the Credibility of Delegation in Organizations
Year: 2015
Type: article
Abstract: Managers delegate the right to make decisions to employees because delegation economizes on scarce managerial attention, fosters the use of local knowledge, and positively impacts employee motivation. This is particularly important in knowledge-intensive organizations that operate in uncertain environments, where employees have specialized knowledge and need to be responsive to local changes. Managers, however, often renege on delegation, particularly in high-uncertainty contexts, because they are tempted to adjust past decisions based on new information. We argue that employees’ knowledge that management may renege on delegated decision rights has negative motivational consequences that are costly in knowledge-intensive organizations. As a consequence, making delegation credible is essential for sustaining the advantages that flow from delegation. Organizational design can play a key role in making delegation credible, supporting the value creation caused by delegated discretion. Our theoretical argument sheds new light on relationships among organizational design, credible delegation, and firm-level value creation.
Source: Journal of Organization Design
DOI: 10.7146/jod.20434
Authors: Diego Stea, Kirsten Foss, Nicolai J. Foss
Institution: Copenhagen Business School
Language: English
Subfield: Management of Technology and Innovation
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,290
OpenAlex ID: W2189229746