Working Paper
Do digital technologies reinforce managerial hierarchies, or instead make them less relevant? The authors propose that
the answer to this question depends on the nature of the technology, specifically its relative impact on
managers’ capacity to supervise and on subordinates’ need for supervision. Applying this framework to
collaborative work management (CWM) technologies that facilitate real-timeco llaboration, communication,
and task coordination, we predict that the adoption of such technologies should reduce managerial intensity
and increase decentralization in organizations.
To test this prediction, the authors use a difference-in-differences
design on a novel dataset built from over 26 million job listings (Lightcast) and over 20 million social profiles
(Revelio) matched to 3,017 US public firms in Compustat, which they track over the period 2010-2019. The authors find
that over the observation window, CWM technology adopters show a 3% reduction in managerial intensity and
a 5-7% increase in nonmanagerial skills linked to decentralization in their job postings in the years following
adoption. The pattern of results is robust to a battery of validations, alternative measures, and specifications,
and strongly supports the idea that these technologies enable collaboration and make organizations less
hierarchical along the dimensions they studied.
Faculty
Professor of Strategy
