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- W2053689482 abstract "Purpose – Due to the great distinctions for the legal environments, institutions and taxations, the restrictive external financing and costly financing cost, and great influence of macroeconomy or regulations on single industry, firms may change or adjust their organization structure to adapt to rapidly changing environment. Flat structure can decentralize the powers to subsidiary managers and can internalize the managerial market to promote competition among subsidiary managers and create an internal capital market within firms to alleviate external financing constrains, and it is matched with the diversification strategy to lower the operation risk and regulation risk for firms in changing environment. The paper aims to discuss these issues. Design/methodology/approach – The data of 6,065 listed corporations in China securities market since 2001-2006 are used to empirically test the hypotheses. Findings – The paper examines the efficiency of flat structure within the firm, investigating its influence on capital allocation and corporate performance. It shows that flat structure is better in emerging market since it is efficient in capital allocation, reducing the inefficient investment by reducing the overinvestment and alleviating the underinvestment, thus beneficial for corporate performance, both short-term and long-term accounting returns. Practical implications – From the results of this study, the paper can derive the important managerial implications that top managers should strengthen flexibility through flat structure so that their firms can grasp opportunities and obtain advantages through efficient improvement of mobility, adaptability, and combination in an uncertain environment. Moreover, flat structure can decentralize the powers to subordinate managers and create an internal managerial market and internal capital market within firms. Originality/value – By using the previous and change of multi-unit structure, the change of corporate performance, diverse and concentrated firms, the paper shows that results are not due to the endogenous problem. The study finds that in less-developed capital market under the current situation, flat structure is better, which suggests that flat structure can properly implement the strategies in emerging market and beneficial for corporate performance." @default.
- W2053689482 created "2016-06-24" @default.
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- W2053689482 date "2013-11-18" @default.
- W2053689482 modified "2023-09-27" @default.
- W2053689482 title "Organizational structure and corporate performance: insights from 6,065 listed corporations" @default.
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- W2053689482 doi "https://doi.org/10.1108/cms-09-2013-0174" @default.
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