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Managerial spans, industry tasks and ICT: evidence from the U.S

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  • Westling, Tatu
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    Abstract

    The knowledge theoretic view of organization of production postulates that ICT, tasks and hierarchies intertwine. Utilizing Occupational Employment Statistics and O*NET data, this study investigates the proposition by exploiting the substantial cross-industry variation in hierarchical forms, which are here captured by spans of control among middle and corporate managers. Information [IT] and communication technologies [CT] are explored separately, and the parsimonious task taxonomy depicts industries in four dimensions: tacit knowledge, cognitive, physical/technical and interaction. The key predictions of the knowledge hierarchy literature can hence be tested and the findings largely reverberate with theory. First, ICT influences middle and corporate manager spans dissimilarly reflecting technological asymmetries in hierarchies. Higher IT utilization narrows organizations yet CT expands middle management. Second, industry tasks govern organizational outcomes. Cognitive tasks flatten and technical/physical tasks narrow hierarchies. Third, the descriptive evidence suggests that hierarchies are highly non-pyramidal across U.S. industries. Finally, the key insight is that spans in top hierarchy are insular to tasks yet organizations down the middle management reflect the nature of industry. With some exceptions the results are robust to exogenous variation in ICT utilization.

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    File URL: http://mpra.ub.uni-muenchen.de/39403/
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39403.

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    Date of creation: 24 May 2012
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    Handle: RePEc:pra:mprapa:39403

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    Keywords: Organization; hierarchy; span of control; tasks; ICT; cross-industry;

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    1. Nick Bloom & Luis Garicano & Raffaella Sadun & John Van Reenen, 2009. "The Distinct Effects of Information Technology and Communication Technology on Firm Organization," CEP Discussion Papers, Centre for Economic Performance, LSE dp0927, Centre for Economic Performance, LSE.
    2. Massimo G. Colombo & Marco Delmastro, 2004. "Delegation of Authority In Business Organizations: An Empirical Test," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 52(1), pages 53-80, 03.
    3. Colombo, Massimo G. & Delmastro, Marco, 1999. "Some stylized facts on organization and its evolution," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 40(3), pages 255-274, November.
    4. Smeets, Valerie & Warzynski, Frederic, 2008. "Too many theories, too few facts? What the data tell us about the link between span of control, compensation and career dynamics," Labour Economics, Elsevier, Elsevier, vol. 15(4), pages 687-703, August.
    5. Lorenzo Caliendo & Ferdinando Monte & Esteban Rossi-Hansberg, 2012. "The Anatomy of French Production Hierarchies," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1867, Cowles Foundation for Research in Economics, Yale University.
    6. Luis Garicano & Esteban Rossi-Hansberg, 2006. "Organization and Inequality in a Knowledge Economy," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 121(4), pages 1383-1435, November.
    7. Alfred D. Chandler, 1969. "Strategy and Structure: Chapters in the History of the American Industrial Enterprise," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262530090, December.
    8. Luis Garicano, 2000. "Hierarchies and the Organization of Knowledge in Production," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(5), pages 874-904, October.
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