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Delayering and Firm Performance: Evidence from Swiss firm-level Data

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  • Kuhn, Dieter

    (University of Basel)

Abstract

The past decades witnessed a broad trend towards flatter organizations with less hierarchical layers. A reduction of the number of management levels in a corpora- tion can have both positive and negative effects on firm performance with the net effect being theoretically unclear ex ante. NEWLINE The present study uses a nationally representative data set of firms in Switzerland and empirically examines the di- rect performance effects of delayering. Applying ordinary least squares regressions and propensity score matching, this study finds that delayering significantly increases subsequent firm performance. It can be concluded that flatter hierarchical structures seem to enable firms to better realize their competitive advantage in today's fast moving and knowledge-intensive market environment.

Suggested Citation

  • Kuhn, Dieter, 2011. "Delayering and Firm Performance: Evidence from Swiss firm-level Data," Working papers 2011/02, Faculty of Business and Economics - University of Basel.
    • Handle: RePEc:bsl:wpaper:2011/02
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    More about this item

    Keywords

    Delayering; management levels; hierarchical layers; hierarchy; firm performance; treatment effects; selection bias;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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