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Delegation from the CEO to top executives: the role of decision-workload and decision-specific knowledge

23 February 2017 at 11:30 AM - 1:00 PM

Room 205a, Campus on Viale Romania, 32

Speaker: C Rossi, Politecnico di Milano

“DELEGATION FROM THE CEO TO TOP EXECUTIVES: THE ROLE OF DECISION-WORKLOAD AND DECISION-SPECIFIC KNOWLEDGE” - Massimo G. Colombo, Cristina Rossi-Lamastra, Paola Rovelli

Theoretical literature on delegation demonstrated the relevance of the decision authority holder’s (DAH’s) and decision authority recipient’s (DAR’s) knowledge. However, there is still a lack of empirical literature, which mainly focused on the DAH. In this paper we aim to contribute to this literature studying how the decision-workload of the DAH, her decision-specific knowledge and the one of the DAR influence the delegation of decision authority by the DAH to the DAR. We also investigate the interplay between the decision-workload and the decision-specific knowledge. In so doing, we focus on the delegation of a strategic decision in the dyadic relation between the CEO and the TMT manager responsible of that decision domain. Logit estimates on a sample of Italian firms partially confirm hypotheses. The CEO is more likely to delegate a strategic decision when her decision-workload increases, while she is less likely when her decision-specific knowledge increases. In addition, the negative effect of CEO’s decision-specific knowledge is significant only for low values of decision-workload, while it does not matter when the CEO has too many strategic decisions to deal with. At the same time, TMT manager’s decision-specific knowledge matters only when the decision-workload is very high.

Keyword: Delegation of decision authority, individual knowledge, decision-specific knowledge, workload.