The Economics of Organizational Design (eBook)

MASSIMO G. COLOMBO is Professor of Economics of Technical Change at Politecnico di Milano, Italy.MARCO DELMASTRO is Advisor to the President of the Italian Communications Authority (Autorità per le Garanzie nelle Comunicazioni), Italy.

Cover 1
Contents 8
List of Figures and Boxes 13
List of Tables 14
List of Abbreviations 17
Acknowledgments 19
Preface 21
Introduction: A New View of Organizational Design 24
I.1 Preliminary issues in the study of the organization 27
I.1.1 The concept of organization 27
I.1.2 Unit of analysis 28
I.2 An overview of a new approach to the study of organization 28
I.2.1 The roots of the new approach 28
I.2.2 A new approach to the study of organizational design 34
I.3 The substance of the economics of organizational design 36
I.3.1 Transaction cost economics 37
I.3.2 The information processing stream 38
I.3.3 The decentralization of incentive stream 40
I.3.4 On the dynamics of organizational design 43
1 A New Quantitative Empirical Methodology for the Analysis of Organizational Design and Dynamics 46
1.1 Introduction 46
1.2 Measures of organizational design 48
1.2.1 Structural organizational variables: configuration and centralization 48
1.2.2 Organizational practices 54
1.3 International evidence on organizational design and its dynamics 55
1.3.1 Evidence on structural organizational variables 55
1.3.2 Evidence on structural organizational variables based on the new empirical methodology 59
1.3.3 Evidence on the use of organizational practices 73
1.4 Concluding remarks 78
2 The Determinants of the Allocation of Decision Authority 80
2.1. Introduction 80
2.2 A conceptual framework of the determinants of the allocation of decision authority 81
2.2.1 The benefits and costs of delegation of decision authority 81
2.2.2 The determinants of the delegation of decision authority 84
2.3 Empirical evidence on the determinants of the allocation of decision authority 90
2.3.1 The work of the Aston group 90
2.3.2 More on the role of size and technology 92
2.3.3 Country-specific effects 95
2.3.4 New directions in the empirical literature on the determinants of decentralization 98
2.3.5 A synthesis 101
2.4 Evidence on the determinants of the allocation of decision authority based on the new empirical methodology 105
2.4.1 The data 105
2.4.2 The econometric model 107
2.4.3 Econometric results 111
2.4.4 A synthesis 116
2.5 Concluding remarks 118
Appendix 122
2.A.1 Definition and expected effects of the explanatory variables, and results of the econometric estimates 122
3 The Determinants of the Corporate Hierarchy 131
3.1 Introduction 131
3.2 A conceptual framework of the determinants of organizational depth 133
3.3 Empirical evidence on the determinants of organizational depth 137
3.3.1 Size 138
3.3.2 Technological variables 139
3.3.3 Other firm-specific and industry-specific effects 141
3.4 Evidence on the determinants of organizational depth based on the new empirical methodology 142
3.4.1 Specification of the econometric model 142
3.4.2 Explanatory variables 143
3.4.3 Econometric results 145
3.4.4 A synthesis 148
3.5 Concluding remarks 150
Appendix 153
3.A.1 Definition and expected effects of the explanatory variables, and results of the econometric estimates 153
4 Evidence on the Determinants of Organizational Dynamics 158
4.1 Introduction 158
4.2 A conceptual framework of the determinants of organizational dynamics 159
4.2.1 A general framework of organizational dynamics 159
4.2.2 Testable predictions on the determinants of changes in the organizational depth 162
4.3 Empirical evidence on the determinants of the adoption of organizational practices 166
4.3.1 Work in the steel industry 166
4.3.2 Work related to other industries 170
4.3.3 Cross-industry evidence 172
4.4 Empirical evidence on the determinants of changes in structural organizational variables 178
4.4.1 Empirical evidence on the determinants of the adoption of organizational forms 178
4.4.2 Empirical evidence on the determinants of the "flattening" of the corporate hierarchy 178
4.4.3 Evidence on the determinants of organizational dynamics based on the new empirical methodology 185
4.5 Concluding remarks 199
Appendix 204
4.A.1 Methodological issues 204
4.A.2 Definition and expected effects of the explanatory variables, and results of the econometric estimates 205
5 The Effects of Organizational Design on Firm Performance 215
5.1 Introduction 215
5.2 Methodological issues 216
5.2.1 Measurement of performance 216
5.2.2 Unit of analysis 217
5.2.3 Characteristics of data sets 217
5.2.4 Econometric methodology 218
5.3 Effects of organizational design on productivity 220
5.3.1 Single-industry studies 220
5.3.2 Cross-industry evidence 226
5.4 Effects of organizational design on firm profitability 233
5.4.1 Previous empirical evidence 233
5.4.2 Evidence based on the new empirical methodology 234
5.5 More on the complementarity between technological and organizational innovations 237
5.6 Concluding remarks 239
Conclusions 246
Appendix: Data Set and Empirical Methodology 252
Notes 258
References 271
Index 285
A 285
B 285
C 285
D 287
E 289
F 289
G 289
H 289
I 290
J 290
K 290
L 290
M 291
N 291
O 291
P 292
Q 292
R 292
S 293
T 293
U 293
V 294
W 294
Z 294