Negoziabilità del profitto e design organizzativo: una proposta interpretativa (Profitability negotiation and organizational design: an interpretative proposal)

  • Loredana Volpe
  • Gianluca Vagnani
Keywords: profit, ex ante negotiation over rent, organizational design

Abstract

Purpose of the paper: This paper aims to develop a conceptual model, which focuses on the role of ex ante negotiation over rent between owners and executives in accounting for organizational design differences among firms.
Methodology: Development of a theoretical model based on a comprehensive review and cross-fertilization of the literature on both ex ante negotiation over rent and organizational design.
Findings: Our model posits that, when owners and executives negotiate ex ante over rent, an organizational structure tends to emerge that strengthens their bargaining power. This structure approximates the quasi-organic form, with low formalization and some degree of centralization and specialization.
Research limits: We develop detailed propositions linking the issues, but we do not provide empirical validation, which would be a logical next step.
Practical implications: A first implication concerns how different stakeholders may affect total value appropriation for the firm by negotiating ex ante over rent. A second implication refers to the attitude of the quasi-coalition between owners-managers toward building organizational structures that, although not aligned to environmental conditions and adequate to preserve firm survival, might however favor ex ante negotiation over profit. More generally, our model stimulates the debate on the relationship between profit as a negotiable rent, organizational structures and their capacity to favor the development of new capabilities and reduce owners-management conflict of interests.
Originality of the paper: This study is set at the intersection of distinct theoretical perspectives. It revers the nexus of causality between profit and organizational design thereby contributing to the debate on the sources of heterogeneity of firms and their organizational models.

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Published
2018-10-28