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Organizational Structure and Firms' Demand for HRM Practices


  • Eriksson, Tor
  • Ortega, Jaime


A question largely left unanswered in previous studies of firms’ use of HRM practices, and the consequences thereof, is why some firms adopt these practices while others do not. We examine empirically the determinants of firms’ demand for HRM pay, work and training practices with a special focus on the role of differences in the organizational structure of firms. For this purpose we merge data from a detailed questionnaire study of Danish private sector firms’ use of HRM practices with workforce information from linked employer-employee data. We find that firms with a Multi-divisional or a Hybrid structure have a greater demand for (incentive) pay practices and new work practices than companies with a Unitary (functional) form. Moreover, M- and H-firms train more of their employees than the U-firms do, suggesting that employer provided training is linked to the adoption of pay and work practices.

Suggested Citation

  • Eriksson, Tor & Ortega, Jaime, 2014. "Organizational Structure and Firms' Demand for HRM Practices," CEI Working Paper Series 2013-09, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:hitcei:2013-09

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    References listed on IDEAS

    1. Bruce E. Hansen, 2001. "The New Econometrics of Structural Change: Dating Breaks in U.S. Labour Productivity," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 117-128, Fall.
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    5. World Bank, 2001. "World Development Report 2000/2001," World Bank Publications, The World Bank, number 11856.
    6. Bob Baulch, 1997. "Transfer Costs, Spatial Arbitrage, and Testing for Food Market Integration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 477-487.
    7. Barry Bosworth & Susan M. Collins, 2008. "Accounting for Growth: Comparing China and India," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 45-66, Winter.
    8. Abhijit V. Banerjee & Paul J. Gertler & Maitreesh Ghatak, 2002. "Empowerment and Efficiency: Tenancy Reform in West Bengal," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 239-280, April.
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    More about this item


    Organizational structure; Firm choice; Pay and work practices;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • 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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