Some stylized facts on organization and its evolution

There is a striking difference between the large number of theoretical pape rs on firm organization and the lack of quantitative empirical evidence. If on the one side economists are increasingly concerned with organization of firms, on the other side organization still remains an ambiguous concept, hardly analyzed empirically. In this paper, we develop a new empirical meth odology based upon business history and previous theoretical works which al lows us to describe (some aspects of) the organization of firms in quantita tive terms. This approach is instrumental to analyzing the hierarchical str ucture and the allocation of decision-making activities in a sample compose d of 438 Italian metalworking plants. We also study the dynamics of firm or ganization in the period 1975-1997. The results of the analysis show that t he (static) choice of the organizational form crucially relies upon the 'lo ss of control phenomenon'. They also illustrate that the dynamics of hierar chical structure follows an inertial process, characterized by incremental adjustments. Lastly, both the organization of firms and, more interestingly , its evolution differ from one category of firms to another depending cruc ially on firm size. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: D23; L22.