How do companies adjust their organization to national institutions: evidence from matched-pair engineering companies
AbstractCompanies face competitive advantages or disadvantages depending on a country’s national institutional setting. The question is whether and how companies with highly similar product markets and technologies are able to stay competitive if they are located in disadvantaged national institutional settings. Building on the Varieties of Capitalism approach, we analyze the effect of different national institutional settings on one important characteristic of a company’s organizational structure, the span of control of production supervisors. Through plant interviews, we generated a unique dataset of matched-pair engineering companies in Germany, Switzerland, the UK, and the U.S. The findings indicate that the span of control is an important mechanism of adjustment to national institutional settings. Production supervisors in companies producing in coherently coordinated market economy like Germany have on average a broader span of control than those in coherently liberal market economy like the U.S. However, in mixed institutional settings like Switzerland and the UK, we find companies with a broad and companies with a narrow span of control, thus indicating that companies have the strategic power to adjust with their own company-level institutions to either complementing or substituting national institutions.
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Bibliographic InfoPaper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0082.
Length: 33 pages
Date of creation: Dec 2012
Date of revision: Apr 2013
Varieties of Capitalism; organizational structure; matched-pair study; QCA;
Find related papers by JEL classification:
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
- I20 - Health, Education, and Welfare - - Education - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-01-07 (All new papers)
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