Understanding business centralization strategy from a structural equation model

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Abstract

The present investigation was oriented to validate the existing relationship between individual, organizational, and environmental variables, in terms of the presence of centralization or decentralization levels, in line with important results of previous investigations and various hypotheses formulated by Mintzberg (2001) regarding organizational design. For its development, measurement instruments were designed (Robbins & Judge, 2017), validated, and applied for the variables identified in the research to managers of 382 organizations, ensuring the representation of organizations of different sizes and productive sectors. Initially, an initial characterization of the variables under study was carried out, to later carry out an exploratory factor analysis that allowed identify the existence of six dimensions that corresponded to the variables established in the initially proposed model to subsequently corroborate it, using structural equations. It can be stated that the main finding of this research is to verify, through the construction of the structural equation model, the validity of several hypotheses formulated by Mintzberg (2001) related to centralization. Based on the above, it can be stated that the level of centralization in an organization is the result of the conditioning of multiple variables related to the individual characteristics of the managers, the level of maturity of the organizational forms present in the organization, and the characteristics of the environment.

Keywords: Organizational Design, Administration, Centralization, Structural Equation Model

Authors’ individual contribution: Conceptualization — R.P.-C.; Methodology — R.P.-C., G.G.-V., and M.d.M.-G.; Validation — R.P.-C. and M.d.M.-G.; Formal Analysis — R.P.-C. and A.S.-R.; Investigation — R.P.-C., A.S.-R., G.G.-V., R.M.-V., and M.d.M.-G.; Data Curation — R.P.-C.; Writing — Original Draft — R.P.-C.; Writing — Review & Editing — R.P.-C. and A.S.-R.; Visualization — A.S.-R., G.G.-V., and M.d.M.-G.; Supervision — R.M.-V.; Project Administration — G.G.-V.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: L83, O13, Q56

Received: 21.02.2024
Revised: 26.06.2024; 14.08.2024; 31.01.2025
Accepted: 21.02.2025
Published online: 26.02.2025

How to cite this paper: Pérez-Campdesuñer, R., Sánchez-Rodríguez, A., García-Vidal, G., Martínez-Vivar, R., & de Miguel-Guzmán, M. (2025). Understanding business centralization strategy from a structural equation model [Special issue]. Corporate & Business Strategy Review, 6(1), 304–316. https://doi.org/10.22495/cbsrv6i1siart7