Does Decentralization Improve Individual Performance? Not really for Journalists

author(s): 
Yanhui Wu
2008

In this paper, we explore a natural experiment of organizational change from decentralization to centralization in a leading Chinese newspaper. Using a di¤erences-in-di¤erences approach, we …nd that centralization on average increases the journalists’performance, sheding light on the dark sides of decentralization. Contributions of this positive effect mainly comes from those journalists who are potentially associated with large private bene…t and those who are victims of in‡fluence activities under decentralization. Our …ndings are consistent with recent economic theories of organization under a multi-tasking framework. The results highlight the importance of heterogeneity in organizational design.

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