Julie M. Wulf
Associate Professor of Business Administration
Julie Wulf is an Associate Professor at Harvard Business School. She is a Co-Editor of The Journal of Law, Economics, & Organization and a Research Associate of the National Bureau of Economic Research. Wulf”s research examines the internal governance of senior managers - organizational structure, the allocation of decision rights, and incentives - and the interaction with strategy in motivating senior managers to create long-term value for the firm. Her work has been published in academic journals in the fields of economics, finance, and strategy such as Journal of Labor Economics; American Economic Journal: Applied Economics; Review of Economics and Statistics; Journal of Financial Economics; Journal of Law, Economics, and Organization; and Management Science. She also publishes in practitioner publications such as the Harvard Business Review. Select articles have been highlighted in the business press including The Economist; Business Week; The Wall Street Journal and The Financial Times and more scholarly publications such as The NBER Digest. She has made recent television appearances to describe her research.
Wulf currently teaches the MBA elective course Corporate Strategy and Organization in which she has developed a new module “Internal Governance and Strategy Execution: Coordination and Incentives.” She also teaches in the school's executive education program Building and Sustaining Competitive Advantage. Prior to coming to HBS, Wulf was on the faculty at the Wharton School, University of Pennsylvania where she taught the first-year MBA core course in Competitive Strategy to both the full-time and executive MBAs. She won a student teaching award from the full-time MBAs.
Professor Wulf received a Ph.D. in Economics from Columbia University and a M.Sc. from the London School of Economics. Before beginning her doctoral studies, she held several positions in the private sector including Vice President of Corporate Planning and Development at American Express and Senior Associate at Booz-Allen & Hamilton., She was a Principal in a private-equity real estate investment firm in New York where she continues to serve as a director and member of the compensation committee.
Wulf lives in Brookline, MA with her husband, son, and daughter.
My research examines the internal governance of senior managers. Internal governance—which refers to organizational structure, the allocation of decision rights, and incentives—fundamentally shapes how strategy is developed and executed, how firms address coordination problems, and whether managers’ decisions enhance firm value. My research addresses two related questions. First, how has the internal governance of senior management in large US firms evolved over the past two decades, with what implications for decision-making? Second, how do internal governance choices interact to motivate senior management to create long-term value for the firm?
The Evolution of Corporate Structure and Internal Governance of Senior Management
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 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 Journals: 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] (Harvard Business School Working Paper 12-059). Working Paper in pdf format.
Span of Control and Span of Activity [Written with Bandiera, Oriana, Andrea Prat, and Raffaella Sadun] Harvard Business School Working Paper, No. 12-053, December 2011. (Revised February 2012.) Working Paper in pdf format.
The Flattened Firm--Not As Advertised, California Management Review, 55 no. 1, (Fall 2012). Working Paper in pdf format.
How Many Direct Reports, [Written with Gary L. Neilson], Harvard Business Review, 90, no. 4 (April 2012). Article in pdf format.
Non-Financial Internal Governance Choices
My research shows how firms combine many facets of internal governance to motivate managers. A perspective that underlies much of my research is that managers are not motivated by financial rewards alone: “it’s not just about the money.” Armed with this perspective, I have investigated compensation design in conjunction with other governance aspects that managers care about. For example, I study perquisites that increase managerial productivity or enhance status (e.g., corporate jets and chauffer services); location decisions that acknowledge social factors (i.e., managerial concern for employee welfare and visibility in the community); the effect of peer comparisons in the setting of executive pay; decision rights or “the right to be the boss” in mergers and acquisitions; the size of divisional investment budgets in internal capital markets; and the position in the organizational hierarchy. Taken together, these papers provide compelling evidence of the importance of non-financial rewards in motivating managers.
I. Perquisites, Social Factors & Geography, Peer Comparison
Are Perks Purely Managerial Excess? [Written with Raghuram G. Rajan], Journal of Financial Economics 79, no. 1 (January 2006): 1-33. (Winner of Second Place 2006 Jensen Prize for "Best Paper on Corporate Finance and Organizations" presented by Journal of Financial Economics .) Journal Article in pdf format.
Trade-offs in Staying Close: Corporate Decision Making and Geographic Dispersion [Written with Augustin Landier and Vinay Nair]. Review of Financial Studies Vol. 22 No.3 (March 2009): 1119-1148. Journal Article in pdf format.
Pay Harmony: Peer Comparison and Executive Compensation, [Written with Claudine Gartenberg], HBS Working Paper #13-041 (April 2013). Working Paper in pdf format.
II. Decision Rights in M&A (or "the right to be the boss")
How Do Acquirers Retain Successful Target CEOs? The Role of Governance, [Written with Harbir Singh], Management Science 57, no. 12 (December 2011): 2011-2114. Journal Article in pdf format.
Do CEOs in Mergers Trade Power for Premium? Evidence from 'Mergers of Equals', Journal of Law, Economics and Organization 20, no. 1 (April 2004): 60-101. Journal Article in pdf format.
Financial Compensation & Firm Outcomes
My research examines how the performance effects of internal governance choices and the design of compensation vary by managerial position. For example, I document links between innovation and stock options for corporate R&D heads; earnings management and bonuses for CFOs; and resource allocation in internal capital markets and the performance measures for division manager bonuses. Overall, these findings are significant because they demonstrate the complementary nature of internal governance choices, the importance of recognizing non-monetary incentives, and the differential incentive effects across managerial positions.
Influence and Inefficiency in the Internal Capital Market , Journal of Economic Behavior and Organization 72, no.1 (October 2009): 305-321. Article in pdf format.
Internal Capital Markets and Firm-Level Compensation Incentives for Division Managers, Journal of Labor Economics 20, no. 2 (April 2002): S219-S262. Journal Article in pdf format.
Authority, Risk, and Performance Incentives: Evidence from Division Manager Positions Inside Firms, Journal of Industrial Economics 55, no. 1 (March 2007): 169-196. Journal Article in pdf format.
Innovation and Incentives: Evidence from Corporate R&D [Written with Josh Lerner]. The Review of Economics and Statistics 89, no. 4 (November 2007): 634-644. Journal Article in pdf format.
Earnings Management from the Bottom Up: An Analysis of Managerial Incentives Below the CEO [Written with Felix Oberholzer-Gee]. (HBS Working Paper 12-056). Working Paper in pdf format.
All Publications and Course Material