The Growth of Hierarchy in Organizations: Managing Knowledge Scope

56 Pages Posted: 3 Jun 2020 Last revised: 24 Aug 2022

See all articles by Megan Lawrence

Megan Lawrence

Vanderbilt University - Strategy and Business Economics

Christopher Poliquin

UCLA Anderson School of Management

Date Written: August 19, 2022

Abstract

Theory posits hierarchy as a response to coordination challenges and emphasizes organization
size and the need to transfer knowledge between people as the mainspring of these challenges.
Building on the knowledge-based view, we propose that knowledge scope—the variety of
knowledge across an organization’s members—also affects coordination costs and therefore the
use of hierarchy. Using an economy-wide database from Brazil, we show that firms are more
likely to expand their hierarchy when knowledge scope increases. This effect varies with firms’
capacities to manage knowledge; firms whose employees perform more similar tasks or have
shared experience at previous employers are less likely to expand hierarchy in response to
increases in knowledge scope. We reveal knowledge scope to be an understudied determinant of
organizational hierarchy.

Keywords: organizational structure, hierarchy, knowledge scope, knowledge-based view, new ventures

JEL Classification: M10, D20, M13

Suggested Citation

Lawrence, Megan and Poliquin, Christopher, The Growth of Hierarchy in Organizations: Managing Knowledge Scope (August 19, 2022). Available at SSRN: https://ssrn.com/abstract=3594400 or http://dx.doi.org/10.2139/ssrn.3594400

Megan Lawrence (Contact Author)

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

HOME PAGE: http://www.meganllawrence.com

Christopher Poliquin

UCLA Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
5
Abstract Views
488
PlumX Metrics