Information Technology, Organizational Delayering, and Firm Productivity: Evidence from Canadian Microdata

Lynn Wu, Operations, Information and Decisions, The Wharton School, and Bryan Hong, Stern, New York University

Abstract: This proposal explores how information technology and innovation in digitization affect organizational structure. Similar to earlier wave of IT adoption that substituted certain routine tasks, we plan to use the Workplace and Employee Survey from Canada to show that this new wave digitization and IT investments can induce a structural change in organizational hierarchies that differ from prior technologies. Instead of the moving firm hierarchies toward centralization and decentralization, we show that IT can delayer the middle management, empowering both people at the top and at the bottom.