Power Consumption Efficiency in Multiunit Firms

Abstract

Strategic management literature suggests that business units/subsidiaries have learning benefits from their intra-organizational knowledge networks. In this paper, we continue exploring those benefits by examining the contingent effect of the network size on the business units’ resource consumption efficiency in the context of power consumption. We argue that by facing a wider range of power consumption practices within their structure, multiunit organizations can develop better power consumption practices and then share those with their business units. However, building on the attention-based view, we contend that the internalization of that knowledge would require the units’ managerial attention. We suggest that such managerial attention is more likely to be provided when a business unit is facing higher competition, experiences financial problems, and when its management’s employment risks are stronger tied to that business unit. Our findings from a multilevel analysis of the power consumption efficiency in 2,347 subsidiaries of Canadian private firms in 2012-2016 support those contentions. The implications for theory and practice are discussed.