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How do companies adjust their organization to national institutions: evidence from matched-pair engineering companies

Silvia Teuber and Uschi Backes-Gellner

No 82, Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW)

Abstract: Companies face competitive advantages or disadvantages depending on a country’s national institutional setting. The question is whether and how companies with highly similar product markets and technologies are able to stay competitive if they are located in disadvantaged national institutional settings. Building on the Varieties of Capitalism approach, we analyze the effect of different national institutional settings on one important characteristic of a company’s organizational structure, the span of control of production supervisors. Through plant interviews, we generated a unique dataset of matched-pair engineering companies in Germany, Switzerland, the UK, and the U.S. The findings indicate that the span of control is an important mechanism of adjustment to national institutional settings. Production supervisors in companies producing in coherently coordinated market economy like Germany have on average a broader span of control than those in coherently liberal market economy like the U.S. However, in mixed institutional settings like Switzerland and the UK, we find companies with a broad and companies with a narrow span of control, thus indicating that companies have the strategic power to adjust with their own company-level institutions to either complementing or substituting national institutions.

Keywords: Varieties of Capitalism; organizational structure; matched-pair study; QCA (search for similar items in EconPapers)
JEL-codes: I20 J50 L23 L64 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2012-12, Revised 2013-04
References: View references in EconPapers View complete reference list from CitEc
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