Abstract
Recent years have witnessed an enormous amount of reorganization of the corporate sector in the United States and Europe. This article examines the role of market competition in this trend of corporate reorganization. We find that, at intermediate levels of competition, the CEO of the corporation decides to have less power inside the firm and to delegate control to lower levels of the firms’ hierarchy. Workers’ empowerment and the move to a flatter organizational structure emerge as an equilibrium when competition is not too tough and not too weak. The model predicts merger waves or waves of outsourcing when countries become more integrated in the global economy as the corporate sector reorganizes in response to an increase in international competition.
Item Type: | Journal article |
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Faculties: | Economics Economics > Chairs > Chair of International Economics |
Subjects: | 300 Social sciences > 330 Economics |
Language: | English |
Item ID: | 19255 |
Date Deposited: | 15. Apr 2014, 08:49 |
Last Modified: | 04. Nov 2020, 13:00 |