Do not reorganize economies away — Scale, scope and decentralization

摘要

To improve adaptability to changing market circumstances, firms continually review the internal balance between differentiation and integration. More intense competition increases internal differentiation, usually called ‘decentralization’ by practitioners. Simultaneously, many firms' information managers maintain that integration of data should be used as a means of increasing adaptability and to lower data processing expenditure (hard- and software, training). This paper is an assessment of some managerial issues; it is an examination of the author's practical experience and a selective study of cases in the Netherlands. Based on practitioners' views, it emphasizes the risk of overestimating the advantage of decentralized information management. This paper offers an approach to keeping potential synergy in place, through analysis of scale and scope economies.