Common purpose advantage: Reviving a managerial theory of the firm?

Deskripsi

What is the most effective way to distribute organizational objectives across managers? While prior work suggests managers should each focus on a single objective, we draw on Barnard's original insights on corporate purpose to identify conditions when managers pursuing the full set of objectives is advantageous. Using a computational model, we find that moderate strategic diversity amongst managers enables practice sharing to generate sufficiently valuable distant search to offset the additional complexity incurred during local search, creating a “common purpose advantage.” The advantage is stronger with fewer objectives, moderate objective correlation, less diversification, and moderate turbulence. Under other conditions, it dissipates or reverses. This work unifies scattered findings on multi-objective firms, contributes to diversification research, and revives interest in the Managerial Theory of the Firm.