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Ownership, Size, and the Formal Structure in Organizations: Evidence from US Public and Private Firms, 1992-2002

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Intellectual Contribution by Lihua Wang

Contribution Title

Ownership, Size, and the Formal Structure in Organizations: Evidence from US Public and Private Firms, 1992-2002

Publication

Industrial and Corporate Change

Co-author

Year

2009

Description

This study considers the effects of (i) ownership structure, (ii) prior size dynamics

of growth and decline, and (iii) organizational size on changes in the formal

structure of organizations. Using a broad sample of almost 70,000 US public

and private firms, I test the arguments by estimating conditional logistic regressions

using as dependent variables two dimensions of organizational structural

differentiation: the number of formal subunits and hierarchical levels. The findings

show that public firms are more likely to elaborate structurally, but less likely to

simplify their structural differentiation. As organizations grow/decline in size, they

apparently tend to increase/decrease their degree of structural differentiation.

However, for a given change in size, the level of structural differentiation is less

likely to increase during growth than it is to decrease during decline, indicating an

asymmetric pattern. I also find that organizational size can serve as a facilitator or

inhibitor for structural change, depending on the direction of change. Finally,

I find that the asymmetric pattern of growth and decline works differently for

large and small firms. The same proportional increase in size is more likely to

generate structural differentiation for larger firms than for smaller firms. But

the same proportional decrease in size has a smaller likelihood of causing

structural de-differentiation for larger firms than for smaller firms.

Complete Citation

Wang, Lihua. (2009). "Ownership, size, and the formal structure of organizations: evidence from US public and private firms, 1992-2002",Industrial and Corporate Change,18: 595-636.

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