DIGITAL COLLABORATION TECHNOLOGIES AND MANAGERIAL INTENSITY IN U.S. CORPORATIONS: AN EXAMINATION

Strategy & Business Policy

Speaker: Arianna Marchetti 

Assistant Professor - London Business School

Conference  Jouy-en-Josas T017

This version: December 2023

Abstract

Observers of novel, technology-enabled forms of organizing have argued that digital technologies enable effective decentralization and can, therefore, reduce reliance on managers in organizations. However, systematic evidence has been scarce, and countervailing narratives exist that portray digital technologies as increasing the degree of coercion and control of subordinates by managers (i.e., “Digital Taylorism”). We develop a theoretical explanation for why digital collaboration technologies (DCTs) should lower managerial intensity and increase decentralization in organizations. To test this argument, we apply a differences-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 in the period 2010-2019. We find that over the observation window, DCT 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 alternative measures and specifications and strongly supports the idea that DCTs make organizations less hierarchical along the dimensions we studied.