BHC-Trichy

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    Is Flat for Everyone? Evidence from a Field Experiment of Structural Decentralization
    (2022-04-16) Michael Y. Lee; Paul I. Green
    While flattening hierarchies and distributing decision making downward is sometimes described as a form of occupational nirvana for contemporary knowledge workers, prior research on the effects of decentralization on employee work experience has been mixed. This calls for greater examination of the sources of heterogeneity in workers’ responses to decentralization. In this study, we conduct a field experiment where groups were randomly assigned either to operate in a decentralized structure or to remain in a traditional hierarchical structure. We use this experiment to examine the causal effect of decentralization on employee work experience, as well as to explore whether and how the effects of decentralization vary depending on employee ability and work preferences. We show that decentralization had no average effect on employee work experience—measured as job satisfaction, engagement, and turnover intention—but decentralization improved the work experience of employees with high job-related ability and employees with strong a priori preferences for working in a decentralized structure. Conversely, we show decentralization negatively impacted the experience of employees with low ability and weak preferences for decentralization. This study provides novel insights into the effects of decentralization, the micro-foundations of organizational design, and the human consequences of the future of work.