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Two Perspectives on Multiskilling and Product Market Volatility

  • DeVaro, Jed
  • Farnham, Martin

We study the effect of product market volatility on a firm’s choice between multiskilling and specialization. We construct a theoretical model that captures the tradeoff between multiskilling (which gives greater flexibility to reassign workers in production) and specialization (which provides workers with the expertise to respond to product market signals in their area of specialty). Using data from the 2004 WERS, a nationally-representative cross section of British establishments, we find that greater volatility is associated with greater specialization. This result holds both inside and outside of manufacturing, but consistent with our model, it holds only in multi-product establishments and not in single-product ones.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 23089.

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Date of creation: 11 Mar 2010
Date of revision:
Handle: RePEc:pra:mprapa:23089
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  1. Oliver Hart & John Moore, 1999. "On the design of hierarchies: coordination versus specialization," LSE Research Online Documents on Economics 19340, London School of Economics and Political Science, LSE Library.
  2. Cindy Zoghi & Alec Levenson & Michael Gibbs, 2005. "Why Are Jobs Designed the Way They Are?," Working Papers 382, U.S. Bureau of Labor Statistics.
  3. Raouf, BOUCEKKINE & Patricia, CRIFO, 2003. "Human Capital Accumulation and the Transition from Specialisation to Multi-tasking," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2003020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  4. Jaime Ortega, 2001. "Job Rotation as a Learning Mechanism," Management Science, INFORMS, vol. 47(10), pages 1361-1370, October.
  5. Hodaka Morita, 2002. "Multiskilling, Delegation, and Continuous Process Improvement: A Comparative Analysis of U.S.-Japanese Work Organizations," Labor and Demography 0207004, EconWPA.
  6. Lindbeck, Assar & Snower, Dennis J, 2000. "Multitask Learning and the Reorganization of Work: From Tayloristic to Holistic Organization," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 353-76, July.
  7. Carmichael, H.L. & Macleod, W.B., 1991. "Multiskilling, Technical Change and the Japanese Firm," Cahiers de recherche 9112, Universite de Montreal, Departement de sciences economiques.
  8. Masahiko Aoki, 2013. "Horizontal vs. Vertical Information Structure of the Firm," Chapters, in: Comparative Institutional Analysis, chapter 5, pages 57-58 Edward Elgar.
  9. Tor Eriksson & Jaime Ortega, 2006. "The adoption of job rotation: Testing the theories," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 59(4), pages 653-666, July.
  10. Kato, Takao & Owan, Hideo, 2007. "Market Characteristics, Intra-Firm Coordination, and the Choice of Human Resource Management Systems: Evidence from New Japanese Data," Working Papers 104-25, Department of Economics, Colgate University.
  11. Wouter Dessein & Tano Santos, 2006. "Adaptive Organizations," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 956-985, October.
  12. Itoh, Hideshi, 1994. "Job design, delegation and cooperation: A principal-agent analysis," European Economic Review, Elsevier, vol. 38(3-4), pages 691-700, April.
  13. Morita, Hodaka, 2001. "Choice of Technology and Labour Market Consequences: An Explanation of U.S.-Japanese Differences," Economic Journal, Royal Economic Society, vol. 111(468), pages 29-50, January.
  14. Elizabeth Webster, 2004. "Firms' decisions to innovate and innovation routines," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(8), pages 733-745.
  15. Paul Osterman, 1994. "How common is workplace transformation and who adopts it?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(2), pages 173-188, January.
  16. Edward P. Lazear, 2009. "Firm-Specific Human Capital: A Skill-Weights Approach," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 914-940, October.
  17. Jed DeVaro, 2005. "Teams, Autonomy, and the Financial Performance of Firms," Labor and Demography 0508004, EconWPA.
  18. Metin M. Cosgel & Thomas J. Miceli, 1999. "Job Rotation: Cost, Benefits, and Stylized Facts," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 155(2), pages 301-, June.
  19. Rob Simmons & David Berri, 2009. "Gains from Specialization and Free Agency: The Story from the Gridiron," Review of Industrial Organization, Springer, vol. 34(1), pages 81-98, February.
  20. Jed DeVaro, 2005. "The Effects of Self-Managed and Closely-Managed Teams on Labor Productivity and Product Quality: An Empirical Analysis of a Cross Section of Establishments," Labor and Demography 0510002, EconWPA.
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