Bidwell 2010

Abstract

How the structure of decision making affects the way that firms manage their boundaries

The characteristics of decisions and organizational structure that are most likely to lead boundary decisions to deviate from existing predictions

Balance multiple goals -> Transaction alignment

Multiple decisions taken by multiple, locally rational units -> Simple problems about whether to make or buy

Topic: Management of IT consultants in a financial services firm

Finding: 

1 Senior managers at the firm focused on cost and organizational flexibility

2 Frontline managers concentrated on exploiting workers' existing knowledge

1 + 2 + Complex demands of transaction alignment

-> Three problems

1) Separation of related decisions about internal capacity and project staffing

2) Incomplete information when deciding on organizational capacity

3) Incentive misalignment in staffing consultants

 -> Firm to become dependent on its consultants

* Introduction

* Theory

- Firm boundaries and organizational decision making

* Research setting and methods

- Independent consultants at the bank

- Data collection

* Decision making and transaction misalignment 

- Defining transaction alignment in the use of consultants

- Evidence of misalignment 

- Misalignment and the structure of decision making

- Alternative interpretations of the case

* Discussion

- Limitation and future research

- Conclusion