Working Paper
Do digital technologies reinforce managerial hierarchies, or instead make them less relevant? We 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-time collaboration, 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, we 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 we track over the period 2010-2019. We find that over the observation window, CWM technology adopters show a 3% reduction in managerial intensity and a 5-7% increase in non-managerial 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 we studied.
Faculty
Professor of Strategy
