Research Summary

The Evolution of Corporate Structure, Internal Governance, and Leadership



My research documents the evolution of the internal governance of senior management in large US firms over a 20-year period and explores, via multiple methods, the causes and consequences of these changes. My findings suggest that firms, in response to increased competition from globalization and reduced costs of information technology, have adopted a structure at the top that is distinct from the traditional, highly-decentralized multidivisional organization documented by Chandler (1962). In large-sample, longitudinal studies of Fortune 500 firms, I show that CEOs have substantially changed the structure and incentives at the top as they shift strategies toward less diversified portfolios. They have “flattened” their firms: they reduced the number of management levels, doubled the size of their executive teams while changing the composition, and substantially increased performance-based pay. To investigate the implications for decision-making, I complement the large-sample research with CEO interviews – what CEOs “say” – and a survey of CEO time use – what CEOs “do.” Taken together, the evidence from multiple methods suggests that large US firms have shifted toward a structure that relies on greater coordination among the top team and a more involved CEO. Another novel insight from this research is that “delayering” at the very top of the pyramid – typically associated with the delegation of authority – is a complex phenomenon that is more indicative of centralization.

The Flattening Firm: Evidence from Panel Data on the Changing Nature of Corporate Hierarchies
, [Written with Raghuram G. Rajan],
The Review of Economics and Statistics, 88, no. 4 (November 2006): 759-773.  Journal Article in pdf format.

The Flattening Firm and Product Market Competition: The Effect of Trade Liberalization on Corporate Hierarchies,[Written with Maria Guadalupe], American Economic Journal: Applied Economics, 2, (October 2010): 105-127. Journal Article pdf format.

Who Lives in the C-Suite? Organizational Structure and the Division of Labor in Top Management, [Written with Maria Guadalupe and Hongyi Li], Management Science
(forthcoming).Paper in pdf format.

Span of Control and Span of Attention [Written with Oriana Bandiera, Andrea Prat, and Raffaella Sadun],
 Harvard Business School Working Paper, No. 12-053, December 2011. (Revised February 2012, February 2014.)  Working Paper in pdf format.

The Flattened Firm--Not As Advertised, California Management Review,  55 no. 1, (Fall 2012). Journal Article in pdf format.

How Many Direct Reports, [Written with Gary L. Neilson], Harvard Business Review, 90, no. 4 (April 2012). Journal Article in pdf format.