Who Lives in the C-Suite? Organizational Structure and the Division of Labor in Top Management
This paper shows that top management structures in large US firms radically changed since the mid-1980s. While the number of managers reporting directly to the CEO doubled, the growth was driven primarily by functional managers rather than general managers. Using panel data on senior management positions, we explore the relationship between changes in executive team composition, firm diversification, and IT investments--which arguably alter returns to exploiting synergies through corporate-wide coordination by functional managers in headquarters. We find that the number of functional managers closer to the product ("product" functions i.e., marketing, R&D) increase as firms focus their businesses, while the number of functional managers farther from the product ("administrative" functions i.e., finance, law, HR) increase with IT investments. Finally, we show that general manager pay decreases as functional managers join the executive team suggesting a shift in activities from general to functional managers--a phenomenon we term "functional centralization."
|Date of creation:||Feb 2012|
|Date of revision:|
|Publication status:||published as Prev Volume 60 Issue 4, April 2014, pp. 824-844 Next Who Lives in the C-Suite? Organizational Structure and the Division of Labor in Top Management Maria Guadalupe INSEAD, 77300 Fontainebleau, France; and Centre for Economic Policy Research, London EC1V 3PZ, United Kingdom firstname.lastname@example.org, Hongyi Li Australian School of Business, University of New South Wales, Sydney NSW 2052, Australia email@example.com, Julie Wulf Harvard Business School, Harvard University, Boston, Massachusetts 02163; and National Bureau of Economic Research, Cambridge, Massachusetts 02138 firstname.lastname@example.org|
|Note:||CF LS PR|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Luis Garicano, 2000. "Hierarchies and the Organization of Knowledge in Production," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 874-904, October.
- 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
dp0927, Centre for Economic Performance, LSE.
- Nick Bloom & Luis Garicano & Raffaella Sadun & John Van Reenen, 2009. "The distinct effects of information technology and communication technology on firm organization," LSE Research Online Documents on Economics 25477, London School of Economics and Political Science, LSE Library.
- Bloom, Nicholas & Garicano, Luis & Sadun, Raffaella & Van Reenen, John, 2013. "The distinct effects of Information Technology and Communication Technology on firm organization," CEPR Discussion Papers 9762, C.E.P.R. Discussion Papers.
- Nicholas Bloom & Luis Garicano & Raffaella Sadun & John Van Reenen, 2009. "The distinct effects of Information Technology and Communication Technology on firm organization," NBER Working Papers 14975, National Bureau of Economic Research, Inc.
- Dessein, Wouter & Garicano, Luis & Gertner, Robert, 2007.
"Organizing for Synergies,"
CEPR Discussion Papers
6019, C.E.P.R. Discussion Papers.
- Alfred D. Chandler, 1969. "Strategy and Structure: Chapters in the History of the American Industrial Enterprise," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262530090, June.
- Jacques Cremer & Luis Garicano & Andrea Prat, 2006.
"Language and the Theory of the Firm,"
784828000000000373, UCLA Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:17846. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.