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Seven Negotiation Lessons from Amazon's HQ Disaster in Queens

After a lengthy courting process, Amazon thought its plan for a New York HQ campus was in the bag. But the company failed a primary goal of negotiations, says James Sebenius. Open for comment; 0 Comments.

Can Miguel McKelvey Build the ‘Culture Operating System’ at WeWork?

How deeply does the culture of a startup matter? Can it be shaped? Professor Jeffrey Rayport discusses WeWork cofounder Miguel McKelvey’s innovative role in building a company culture to support rapid growth. Open for comment; 0 Comments.

Specific Knowledge and Divisional Performance Measurement

Performance measurement is one of the critical factors that determine how individuals in an organization behave. It includes subjective as well as objective assessments of the performance of both individuals and subunits of an organization such as divisions or departments. Besides the choice of the performance measures themselves, performance evaluation involves the process of attaching value weights to the different measures to represent the importance of achievement on each dimension. This paper examines five common divisional performance measurement methods: cost centers, revenue centers, profit centers, investment centers, and expense centers. The authors furnish the outlines of a theory that attempts to explain when each of these five methods is likely to be the most efficient. Key concepts include: Each of these methods can be seen as providing an alternative way of aligning corporate decision-making authority with valuable "specific knowledge" inside the organization. Jensen and Meckling's theory suggests that cost and revenue centers work best in cases where headquarters has (or can readily obtain) good information about cost and demand functions, product quality, and investment opportunities. Decentralized profit and investment centers tend to supplant revenue and cost centers when managers of business units have a significant informational advantage over headquarters. Closed for comment; 0 Comments.