Hierarchy Design with Socialism in Internal Capital Markets

內部資本市場中的社會主義下之組織層級設計

10.29628/AEP.200803.0002

周嗣文(Eric S. Chou)

M型假說 ； 層級 ； 內部資本市場 ； M-form hypothesis ； Hierarchy ； Internal capital markets

經濟論文

36卷1期（2008 / 03 / 01）

25 - 52

英文

近來許多實證研究發現，在多部門公司中，利潤較高的部門常投資過少；而利潤較低的部門常投資過多。這現象在文獻中被稱為「內部資本市場中的社會主義」(SICM)。本文嘗試由這個角度，來比較扁平型組織與高深型組織之效率。我們將SICM模型加入一個組織可以經白授權予部門經理，而從一個高深型組織，轉型成扁平型組織的可能性。我們發現此一部門化之作為，會使得SICM的問題更嚴重。此一發現，否定了Williamson著名的M型假說(M-form hypothesis)。另外，一個部門化公司中的SICM問題，可以經白將股權授予低階經理人的方式，獲得舒解。

This paper compares the efficiency of flat and tall hierarchies from the perspective of ”socialism in internal capital markets” (SICM) -a recently documented problem of multi-segment firms in which high-profit segments tend to be underinvested and low-profit segments tend to be overinvested. SICM is characterized with the possibility of divisionalization-grouping elementary business segments into divisions and delegating decisions to division managers, which transforms flat hierarchies into tall hierarchies. We found that divisionalization aggravates the problem of SICM, suggesting that U-form (undivisionalized) organizations can outperform M-form (divisionalized) organizations-a result that is in contrast to Williamson's ”M-form hypothesis.” In addition, the SICM problem for a given divisionalized firm can be alleviated by redirecting more managerial ownership from high-tier managers to low-tier managers.

1. Beggs, A. W.(2001).Queues and Hierarchies.Review of Economic Studies,68,297-322.
2. Berger, P.,E. Ofek(1995).Diversification`s Effect on Firm Value.Journal of Financial Economics,37,39-65.
3. Bernardo, A.,H. Cai,J. Luo(2001).Capital Budgeting and Compensation with Asymmetric Information and Moral Hazard.Journal of Financial Economics,61,311-344.
4. Bolton, P.,D. Scharfstein(1998).Corporate Finance, the Theory of the Firm, and Organization.Journal of Economic Perspectives,12,95-114.
5. Bolton, P.,M. Dewatripont(1994).The Firm as a Communication Network.Quarterly Journal of Economics,109,809-839.
6. Buble, M.(1996).Transition Processes of Organizational Structures in Large Enterprises.Management,1,1-16.
7. Burch, T.,V. Nanda(2003).Divisional Diversity and Conglomerate Discount: Evidence from Spinoffs.Journal of Financial Economics,70,69-98.
8. Chou, E.(2002).Flattened Resource Allocations, Separation of Ownership and Control, and Diversification of the Firm.Proceedings of the 2002 North American Summer Meetings of the Econometric Society.
9. Graham, J.,M. Lemmon,J. Wolf(2002).Does Corporate Diversification Destroy Value?.Journal of Finance,57,695-720.
10. Hammer, M.,J. Champy(1993).Reengineering the Corporation: A Manifesto for Business Revolution.New York:Harper Business.
11. Harris, M.,A. Raviv(1998).Capital Budgeting and Delegation.Journal of Financial Economics,50,259-289.
12. Hart, O.(1995).Firms, Contracts, and Financial Structure.New York:Oxford University Press.
13. Hart, O.,J. Moore(1999).On the Design of Hierarchies: Coordination and Specialization.NBER Working Paper, No. 7388.
14. Itoh, H.(2003).Corporate Restructuring in Japan, Part I: Can M-Form Organization Manage Diverse Businesses?.Japanese Economic Review,54,49-73.
15. Lang, L.,R. Stulz(1994).Tobin`s q, Corporation Diversification, and Firm Performance.Journal of Political Economy,102,1248-1280.
16. Maskin, E.,Y. Quian,C. Xu(2000).Incentives, Information, and Organizational Form.Review of Economic Studies,67,359-378.
17. Rajan, R.,H. Servaes,L. Zingales(2000).The Cost of Diversity: The Diversification Discount and Inefficient Investment.Journal of Finance,55,35-80.
18. Rajan, R.,J. Wulf(2003).The Flattening Firm: Evidence from Panel Data on the Changing Nature of Corporate Hierarchies.NBER Working Paper, No. W9633.
19. Rajan, R.,L. Zingales(2001).The Firm as a Dedicated: A Theory of the Origins and Growth of Firms.Quarterly Journal of Economics,116,805-851.
20. Scharfstein, D.(1998).The Dark Side of Internal Capital Markets II: Evidence from Diversified Conglomerate.NBER Working Paper, No. W6352.
21. Scharfstein, D.,J. Stein(2000).The Dark Side of Internal Capital Markets: Divisional Rent Seeking and Inefficient Investment.Journal of Finance,55,2537-2564.
22. Shin, H.,R. Stulz(1998).Are Internal Capital Markets Efficient?.Quarterly Journal of Economics,113,531-553.
23. Stein, J.(2002).Information Production and Capital Allocation: Decentralized versus Hierarchical Firms.Journal of Finance,57,1891-1921.
24. Stole, L.,J. Zwiebel(1996).Organizational Design and Technology Choice under Intrafirm Bargaining.American Economic Review,86,195-222.
25. Whited, T.(2000).Is It Inefficient Investment That Causes the Diversification Discount?.Journal of Finance,56,1667-1692.
26. Williamson, O.(1975).Markets and Hierarchies, Analysis and Antitrust Implications: A Study in the Economics of Internal Organization.New York:Free Press.