Rotterdam School of Management, Erasmus U., Netherlands
Decision-making structures in organizations can address the challenge of misalignment between individual preferences and organizational outcomes. We theorize that delegated and intensity-based decision-making models can mitigate the negative impact of this misalignment on participation. Utilizing a comprehensive dataset from Snapshot, a decentralized autonomous organization (DAO) governance platform, we examine the impact of misalignment on participation. Findings reveal that sustained misalignment notably reduces member participation. However, implementing delegated decision-making structures, where decision authority is transferred to representatives, significantly alleviates this negative impact. Similarly, intensity-based decision-making structures, which considers the varying importance of individual preferences, also mitigate the adverse effects of misalignment. The study advances our understanding of organizational behavior in decentralized organizations, shedding light on the pivotal role of decision-making structures in harmonizing individual preferences and organizational objectives.
