Diversified firms often trade at a discount with respect to their focused counterparts. The literature has tried to explain the apparent misallocation of resources with lobbying activities or power struggles. We show that diversification can destroy value even when resources are efficiently...

One of the most complex and sophisticated managerial tools is the profit centers based management. Promoting and using the profit centers based management in the Romanian companies represents a condition for the economic and commercial success. By its content, the profit centers based management...

Profit centers in a firm in multidivisional form agree in the ex antestage upon a plan about their joint production and profit imputation. The plan isexecuted in the subsequent two periods of the interim stage. In the first interimperiod, each center has its private information, but a part of...

This paper analyses the impact of variations of product demand on the amount of internal slack in multi-plant firms in a model in which facilities can produce output at a privately known cost up to a previously determined capacity level. It is shown that the amount of slack in the firm is...

The costs of vertical integration are analyzed within a game-theoretic signaling model. It is shown that a company when being vertically integrated with a supplier may well decide to buy certain components from this supplier even at a lower quality than that offered by external sources. When the...

The purpose of the article is to present a way of organizing the management accounting so that it should admit calculation cost for each formed cost center and finally, to determine the obtained result by comparing costs with achieved revenues. From the current way of collecting costs analysis,...

The costs of vertical integration are analyzed within a game-theoretic signaling model. It is shown that a company when being vertically integrated with a supplier may well decide to buy certain components from this supplier even at a lower quality than that offered by external sources. When the...