◆Presenter
Name:SEA JIN CHANG
Affiliation: Lim Kim San Chair Professor, NUS Business School, National University of Singapore
◆Abstract:
Research on transaction cost theory to date suggests that the multidivisional form can efficiently organize diverse lines of business. This structural solution, known as the M-form, is not necessarily free from glitches, as it often underestimates the costs of managing inter-divisional resource sharing. In this study, we explore how the transfer of executive managers across business divisions can serve as a key complementary mechanism to reduce the transaction costs associated with corporate-wide resource coordination and control. We find that availability of intangible and tangible financial resources and given exchange relationships among business divisions prompt inter-divisional executive transfer, based on our data of Korean business groups. We further find intensified competition and stronger capital market control diminish the value of such inter-divisional executive transfer and instead promote external recruitments of executives.
◆Inquiries: sakata.mito.75u@st.kyoto-u.ac.jp(Administrative Staff)