Corporate Hierarchy and Vertical Information Flow within the Firm - a Behavioral View

Author(s)

Markus Georg Reitzig, Boris Maciejovsky

Abstract

Little is known about how corporate hierarchies influence managers' propensity to pass information upward within the firm. Two streams of literature arrive at seemingly conflicting and untested predictions. Information economists maintain that middle managers pass more suggestions up the firm's line of command as the corporate hierarchy increases in order to avoid corporate omission errors. In contrast, scholars of organizational psychology suggest that hierarchies lead to evaluation apprehension and foster a perceived lack of control among mid-level managers, leading to their reduced willingness to, and interest in, passing information up within the organization. Drawing on field data and model-guided experimental studies, we provide original empirical evidence for the relevance of all the mechanisms above, and we delineate the conditions under which either mechanism prevails.

Organisation(s)

Department of Accounting, Innovation and Strategy

External organisation(s)

University of California, Berkeley

Journal

Strategic Management Journal

Volume

36

Pages

1979-1999

No. of pages

21

ISSN

0143-2095

DOI

https://doi.org/10.1002/smj.2334

Publication date

12-2015

Peer reviewed

Yes

Austrian Fields of Science 2012

502052 Business administration

Keywords

ASJC Scopus subject areas

Business and International Management, Strategy and Management

Portal url

https://ucris.univie.ac.at/portal/en/publications/corporate-hierarchy-and-vertical-information-flow-within-the-firm--a-behavioral-view(3302ec55-bebe-482d-a7d4-c274d5416164).html