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Do budget institutions play a role in explaining why government effectiveness is higher in some advanced countries than in others?

Employing an original panel data set that covers four years (1991, 2003, 2007 and 2012), we find that budget centralization is associated with lower government effectiveness in OECD countries after accounting for a list of control variables, such as gross domestic product (GDP) per capita, government expenditure and country- and year-fixed effects.

We show that less-centralized countries display significantly better performance in health and infrastructure and a similar effectiveness in tax collections. The negative relationship between budget centralization and government effectiveness seems to manifest, especially at the execution stage of the budgeting process, but it is not significant at the formulation and legislation stages. These results survive a list of sensitivity tests.

Our paper finds that centralization is associated with lower effectiveness in field areas like health and education. However, it has been previously shown that centralization improves fiscal responsibility. Thus, our findings point out to the need of achieving the right balance between fiscal responsibility and government effectiveness.

Results suggest that when governments at the national level are aiming at achieving effectiveness in field areas like health and education, they shall avoid excessive centralization at the execution stage of the budget.

Effectiveness in the provision of public health, and education can be enhanced by giving more power to the field ministries at the execution stage of the budget preparation.

While decentralized budget power was proved at the local government level, this paper belongs to the small group of contributions that deal with this issue at the central government level.

Until recently, scholars have begun to examine the contextual antecedents of employees thriving at work. A recent study has shown that one aspect of organizational structure/context (i.e. formalization) can be an important antecedent of employee thriving at work. However, scholars have urged doing research examining how different aspects of organizational structure can combinedly influence employee work outcomes such as thriving at work. Given that, the present paper proposes a theoretical model to unravel the mechanisms of how two aspects of organizational structure (i.e. formalization and centralization) may operate as the antecedents of employees thriving at work. In particular, the author draws on the Conservation of Resources Theory (COR) to hypothesize that employees' work engagement mediates the relationship between their perception of formalization and thriving at work. The author further hypothesizes that the indirect relationship between formalization and employee thriving at work is moderated by employees' perception of centralization, such that the relationship is stronger in the presence of a lower level of centralization than higher.

The author gathered data by employing a time-lagged survey design involving 136 full-time employees from different organizations.

Results show that employee work engagement mediates the relationship between formalization and employee thriving at work. Further, the indirect relationship between formalization and employee thriving at work is stronger when the level of centralization is relatively low.

Formalization is able to enact employees' thriving at work, particularly when organization implements relatively less centralized structure.

This study first introduces work engagement as a mediator in the formalization–employee thriving at work relationship and centralization as a moderator along this mediating process.

Although decentralisation during crisis is more beneficial in the long run, still economic downturn increases the probability of centralisation. The purpose of this paper is to understand the sub-micro reasons of centralisation during recession.

To answer the research question, a qualitative methodology was applied based on interviews with senior managers of six English and seven Hungarian manufacturing companies.

In the time of crisis, companies centralise because they would like to gain efficiency. The short-term advantages of concentration of authority (such as whole company focus, easier communication and higher decision speed) override its longer term downsides such as less innovation and flexibility.

Cost cutting-driven centralisation can always generate faster results than a hazardous sales increase-driven decentralisation. A rapid centralisation can seem a safer and better choice than a stronger innovative capability of which results can be harvested only in the future. If companies centralise in the time of crisis and delegate during prosperity, adaptation to economic cycles can be crucial. This can gain competitive advantage if the companies can perceive economic situation and restructure their authority better than their competitors.

The paper would like to contribute to the quantitative-dominated literature with a descriptive, qualitative study analysing the root causes of change in concentration of authority.

The purpose of this paper is to discuss the roles of a supply chain management (SCM) department. To achieve that, this study empirically examines the relationship between internal supply chain structure and operational performance, using survey data collected from 108 Japanese manufacturers.

Based on a literature review of not only organizational theory but also other fields such as marketing, logistics management, operations management and SCM, this study focused on two structural properties, formalization and centralization and divided operational performance to firm-centric efficiency and customer-centric responsiveness. To examine the analytical model using these dimensions, this study conducted a structural equation modeling.

The correlation between centralization of operational tasks and centralization of strategic tasks, the impacts of centralization of both tasks on formalization and the effect of formalization on responsiveness performance were demonstrated. In addition, the reasons for formalization not positively influencing efficiency performance were explored through follow-up interviews.

Manufacturers need to formalize, as much as possible, a wide range of SCM tasks to realize operational excellence. To establish such formalized working methods, it is effective to centralize the authorities of both operational and strategic tasks in a particular department. In addition, inefficiency due to strict logistics service levels is a problem that all players involved in the supply chain of various industries should work together to solve.

The theoretical contribution of this study is that the authors established an empirical process that redefined the constructs of formalization and centralization, developed these measures and examined the impacts of these structural properties on operational performance.

Centralization, which indicates distribution of decision-making power in organizations, is well-discussed in innovation literature as one of the influencing factors of innovation implementation. Motivated by a gap in enterprise resource planning (ERP) research, the purpose of this paper is to investigate the influence of centralization on the success of ERP implementation.

Centralization is characterized twofold: policy-related centralization (PRC) and work-related centralization (WRC). ERP implementation success is captured in terms of user acceptance and the use of the ERP system. Using organizational innovation theory, six hypotheses relating centralization, ERP implementation success, and organization size are built and tested using data gathered from 51 Indian organizations that implemented ERP. The data are analyzed using partial least squares-structural equation modeling.

User acceptance is significantly inhibited by PRC. WRC has a negative influence on use. The negative influence of PRC on acceptance is more pronounced in the case of larger organizations. On the whole, a decentralized set-up is favorable to ERP implementation success.

The study highlights the impact of a centralized management structure on success of ERP implementation and in doing so, it demarcates the varied influence of two types of centralization. It contributes to the scarce research on ERP implementation using the strong theoretical basis of organizational innovation. The findings highlight the implications of centralization to the implementation outcomes, for organizations embarking upon ERP.

A report made to the CIES ten years ago on the subject of centralisation vs de‐centralisation found that centralisation acted as ‘a very real motivator for growth’, but that this motivation would reach its limit if the process were carried too far. Another study was recently sponsored by Philip Morris International to gather the views of European members of the CIES on the same subject, and the summary results, printed on the following pages, were presented to the CIES Annual Congress in Estoril, Portugal during May of this year. The results largely echo the findings of the 1968 study, showing a wide variation in the degree of central control to be found in retail chains across Europe, but suggests that to get the best out of managers at local level less, rather than more, centralisation may be needed.

The purpose of this paper is to illustrate how centralization and decentralization of supply chains (SCs) play a major role in creating organizational resilience.

Starting with the basic tenets of contingency theory and applying a grounded theory approach, results from exploratory qualitative and quantitative studies are combined to investigate the impact of (de)centralization on SC resilience capabilities.

The findings from a comprehensive literature review combined with two empirical surveys indicate that four important organizational capabilities are needed in order to cope with internal and external disruptions: fast reactions to unforeseen disturbances, reducing the number of negative external forces, reducing the impact of negative external forces and the quick return to normal operating processes. Furthermore, it is illustrated how (de)centralization activities can support these capabilities and thus maximize the SC resilience.

This paper presents 12 measures for (de)centralization and shows how they can support the four major capabilities of resilient companies. The results from qualitative and quantitative surveys allow for a holistic understanding of the organization and provide a basis for future SC resilience research.

Building on institutional theories, the purpose of this paper is to test the relationship of organizational centralization and public service motivation (PSM), and to explore country’s centralization effect on it.

The quantitative analysis of 390 responses from 42 social care and labor market public service providers operating in two countries with opposite administrative regimes – decentralized Poland and centralized Belarus.

The Polish sample confirms previous observations. Organizational centralization correlates with PSM, while PMS dimensions do not act in concert. In contrast to others, self-sacrifice is positively associated with increased centralization. A country’s context has a strong mediating effect. The Belarusian sample revealed no relationship between organizational centralization and PSM. Because the main difference with Poland lies in the politico-administrative organization of the public sector, the findings suggest further examination of the county’s centralization effects. Democracy is not an imperative for higher PSM. Belarusian employees scored higher than the Polish on attraction to public service. Centralization of state administration does not necessarily indicate higher centralization in separate executive units. Polish organizations scored similar or higher on the questions of organizational centralization.

Context factors correlate differently with separate PSM dimensions, therefore, researchers should always look at PSM as a complex concept. Robust assertions about country’s centralization effect will require further tests on a larger sample of countries with different administrative regimes.

Human resource (HR) managers in decentralized Poland could modify employees’ PSM behavior by altering the centralization level of an organization. In highly centralized Belarus, employees’ PSM is less responsive to centralization changes, thus, HR managers should recruit individuals with the initially high PSM.

First PSM study with the primary data collected in a non-democratic country; first study to simultaneously address centralization on organizational and country levels.

Drawing on the theoretical concept of organisational fit, this paper questions the relevance of employees' participation in the link between continuous improvement (CI) and operational performance. The literature has long emphasised that to be successful, CI implementation needs to rely on employees' involvement as soon as its inception. This paper argues that this approach is not generalisable.

Based on a database of 330 firms across 15 countries, regression analyses were used to hypothesise that the fit between CI and employee participation is positively associated with operational performance, and that the fit between CI and centralisation of authority is negatively associated with operational performance. The authors also ran a robustness check with polynomial regression analyses and the response surface methodology.

CI–employee participation fit is positively associated with operational performance, suggesting that there is less need for employees to be involved when a firm has scarcely developed CI. Employee participation becomes gradually more relevant as CI progresses. Moreover, the results demonstrate that the CI–centralisation of authority fit is negatively associated with operational performance, suggesting that a top-down management approach with centralised authority is preferable when CI is low, whereas a bottom-up management approach is helpful when a firm has extensively developed CI.

This research draws on the concept of organisational fit to explore the relationships between internal practices in the operations management literature. The authors suggest that managers should dynamically balance the practices of employee participation and centralisation of authority as CI improves. This study highlights that CI has different evolutionary levels that require different managerial approaches and practices.

This study empirically investigates the impact of organizational structure (specifically centralization) on the occurrence of the passive leadership. The authors also examine the mediating role of autonomy frustrations and the moderating effect of turnover intentions in these relationships.

Using structural equation modelling as well as PROCESS macro (version 3.5), the research model is analysed based on a sample of 133 employee–supervisor dyads in various public sector organizations in Dubai.

Contrary to the study hypothesis and assumption, the results demonstrate that centralization has no significant direct effect on the occurrence of passive leadership; however, this effect found to be significant only via the mediating of autonomy frustrations (fully mediator). This influence is strengthening when a supervisor has the intentions to leave his/her organizations.

These findings point on how and why centralization can lead to occurrence of passive leadership.