Show simple item record

dc.contributor.authorSmeets, Valerie
dc.contributor.authorWaldman, Michael
dc.contributor.authorWarzynski, Frederic
dc.description.abstractThere is an extensive theoretical literature based on what is called the scale-of-operations effect, i.e., the idea that the return to managerial ability is higher the more resources the manager influences with his or her decisions. This idea leads to various testable predictions including that higher ability managers should supervise more subordinates, or equivalently, have a larger span of control. And although some of this theory’s predictions have been empirically investigated, there has been little systematic investigation of the theory’s predictions concerning span of control. In this paper we first extend the theoretical literature on the scale-of-operations effect to allow firms’ beliefs concerning a manager’s ability to evolve over the manager’s career, where much of our focus is the determinants of span of control. We then empirically investigate testable predictions from this theoretical analysis using a unique single firm dataset that contains detailed information concerning the reporting relationships at the firm. Our investigation provides strong support both for the model’s predictions concerning wages, wage changes, and probability of promotion, and also for the model’s predictions concerning span of control including predictions derived from the learning component of the model. Overall, our investigation supports the notion that the scale-of-operations effect and additionally learning are important determinants of the internal organization of firms including span of control.
dc.subjectscale-of-operations effect
dc.subjectmanagerial ability
dc.subjectspan of control
dc.subjectreporting relationships
dc.titlePerformance, Career Dynamics, and Span of Control
dc.description.legacydownloadsSmeets_Warzynski_Waldman_January_2013.pdf: 703 downloads, before Oct. 1, 2020.
local.authorAffiliationSmeets, Valerie: Aarhus University
local.authorAffiliationWaldman, Michael: Cornell University
local.authorAffiliationWarzynski, Frederic: Aarhus University

Files in this item


This item appears in the following Collection(s)

Show simple item record