The flattening firm and product market competition
Subtitle: the effect of trade liberalization
By: Maria Guadalupe, Julie M. Wulf
Contributors: Wulf, Julie, 1956-; Harvard Business School
Series: Working paper / Harvard Business School -- 09-067; Working paper (Harvard Business School) -- 09-067
Publisher: Harvard Business School
Published: 2008
Place of publication: Boston
Language: eng
Number of pages: 56
Description: This paper establishes a causal effect of competition from trade liberalization on various characteristics of organizational design. We exploit a unique panel dataset on firm hierarchies (1986-1999) of large U.S. firms and find that increasing competition leads firms to become flatter, i.e., (i) reduce the number of positions between the CEO and division managers (DM), (ii) increase the number of positions reporting directly to the CEO (span of control), (iii) increase DM total and performance-based pay. The results are generally consistent with the explanation that firms redesign their organizations through a set of complementary choices in response to changes in their environment.
Notes: "November 2008"--Publisher's web site.

Includes bibliographical references.