Marco Delmastro
"The determinants of the management hierarchy: evidence from Italian plants"
JEL codes: D23
Keywords: organizational structure, hierarchy, technology

Abstract: Economists are increasingly concerned about the internal working of firms and the determinants of organizational structure. Nonetheless, the empirical evidence on these issues is generally scarce. This paper aims to test (some of) the predictions of economic theory on the organizational architecture by looking at the relation between the depth of the management hierarchy of plants and plant- and industry-specific variables. For this purpose, Politecnico di Milano and Università di Pavia have designed a questionnaire analysis which has provided detailed information on the organization of a sample of 438 Italian manufacturing plants. The finding show that the plant size, the characteristics (i.e. vintage and extent of use) of the production and communication technologies in use, the plant's ownership status (i.e. State versus private ownership, and differences in the nationality of firms to which plants belong) figure prominently in explaining the complexity of a plant's organization.