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The Flattened Firm--Not as Advertised

posted Jun 21, 2016, 7:04 PM by Julie Wulf   [ updated Jun 21, 2016, 7:40 PM ]

California Management Review, 55 no. 1, (Fall 2012)
For decades, management consultants and the popular business press have urged large firms to flatten their hierarchies. Flattening (or delayering, as it is also known) typically refers to the elimination of layers in a firm’s organizational hierarchy, and the broadening of managers’ spans of control. The alleged benefits of flattening flow primarily from pushing decisions downward to enhance customer and market responsiveness and to improve accountability and morale. Has flattening delivered on its promise to push decisions downward? In this article, I present evidence suggesting that while firms have de-layered, flattened firms can exhibit more control and decision-making at the top. Managers take note. Flattening can lead to exactly the opposite effects from what it promises to do.

California Management Review



Full PDF Available.

| Attachments: CMR_FlattenedFirm.pdf

Who Lives in the C-Suite? Organizational Structure and the Division of Labor in Top Management

posted Jun 5, 2016, 2:00 PM by Julie Wulf   [ updated Jun 17, 2016, 7:47 AM by Julie Wulf ]

Management Science 60, no. 4 (April 2014): 824–844.
Top management structures in large US firms have changed significantly since the mid-1980s. While the size of the executive team—the group of managers reporting directly to the CEO—doubled during this period, this growth was driven primarily by an increase in functional managers rather than general managers, a phenomenon we term “functional centralization.” Using panel data on senior management positions, we show that changes in the structure of the executive team are tightly linked to changes in firm diversification and IT investments. These relationships depend crucially on the function involved: those closer to the product (“product” functions, e.g. marketing/R&D) behave differently from functions further from the product (“administrative” functions, e.g. finance/law/HR). We argue that this distinction is driven by differences in the information-processing activities associated with each function, and apply this insight to refine and extend existing theories of centralization. We also discuss the implications of our results for organizational forms beyond the executive team.
Full PDF Available.

| Attachments: Wulf_Julie_J15_C-Suite.pdf

How Many Direct Reports?

posted Jun 5, 2016, 1:49 PM by Julie Wulf   [ updated Jun 17, 2016, 7:47 AM by Julie Wulf ]

Harvard Business Review, April 2012
If senior executives are feeling ever-increasing pressure on their time—and few would suggest that’s not the case—why would they add more to their plates? It seems counter intuitive, but according to our research into C-level roles over the past two decades, the CEO’s average span of control, measured by the number of direct reports, has doubled, rising from about five in the mid-1980s to almost 10 in the mid-2000s. The leap in the chief executive’s purview is all the more remarkable when you consider that companies today are vastly more complex, globally dispersed, and strictly scrutinized than those of previous generations.
Full PDF Available.

| Attachments: R1204Hf2.pdf

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