The value of information in internal management communication

Michael Alles, Paul Newman, James Noel

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


In decentralized organizations, managers often negotiate with each other over inter-divisional trades and transfer prices. These activities require disclosures by managers over such variables as the level of divisional income, backorder levels, market trends and prices, returns on investment and so forth. By the nature of the decentralized firm, managers of these divisions may have incentives to under-or overstate these disclosures. In response, the recipients of these disclosures may institute control systems that formally or informally investigate these claims, and so deter biased reporting. In this paper we consider how these control systems will be used and whether they make the receiver better off not investigating. We develop intuition for when information is valuable in this setting.

Original languageEnglish (US)
Pages (from-to)295-317
Number of pages23
JournalJournal of Economic Behavior and Organization
Issue number3
StatePublished - Aug 30 1998
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management


  • Horizontal communication
  • Value of information


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