The Determinants of Organizational Change and Structural Inertia: Technological and Organizational Factors

There are a growing body of theoretical work, wide anecdotal evidence, and a few large-scale empirical studies supporting the view that business firms quite rarely change their organizational structure, a phenomenon usually referred to in the literature as structural inertia. The present paper aims to analyze empirically the determinants of structural inertia and organizational change. As far as we know, this work constitutes the first attempt to directly address such issues through econometric estimates based on a large, longitudinal dataset at plant level. For this purpose, we consider changes of the organizational structure within a sample composed of 438 Italian manufacturing plants observed from 1975 to 1996. More precisely, we specify and test a duration model of the likelihood of an individual plant changing the number of hierarchical tiers after a spell r, provided that no change has occurred up to T. We also analyze the direction of change, distinguishing increases from decreases of the number of managerial layers. We consider a set of plant- and industry-specific explanatory variables that are expected to induce or oppose organizational change. The findings show that the adoption of advanced manufacturing technologies and new human-resources management practices favors organizational change. On the contrary, the presence of sunk costs and the extent of influence activities figure prominently in explaining structural inertia of business organizations.     

Delegation of Authority In Business Organizations: An Empirical Test

This paper tests the predictions of economic theory on the determinants of the allocation of decision-making power through the estimates of ordered probit models with random effects. Our findings show that the complexity of plants' operations and organization, the characteristics of the communication technologies in use, the ownership status of plants and the product mix of their parent companies figure prominently in explaining whether authority is delegated to the plant manager or not. In addition, the nature of the decision under consideration turns out to affect the allocation of authority.     

Technology-Based Entrepreneurs: Does Internet Make a Difference?

This paper is an empirical analysis of the personal characteristics of Italian high-tech entrepreneurs. We analyze differences in the characteristics of founders according to the sector of operation of the start-up. In particular, we investigate whether entrepreneurs in Internet related activities differ from those operating in other ICT industries (especially in manufacturing). For this purpose, we analyze a sample composed of 246 entrepreneurs that between 1984 and 1999 established 116 new firms that operate in ICT manufacturing and service industries and are located in Northern Italy. The findings highlight that Internet entrepreneurs generally are younger and less educated (especially in technical fields) than the other sample founders. They quite often are at their first professional experience; if they have prior working experience, it generally is in unrelated industries. Such findings are related to evolutionary theories that emphasize the role of the nature of technical change and of the stage of the industry life cycle in influencing the characteristics and behavior of new firms and their founders.