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ICC Advance Access originally published online on November 17, 2007
Industrial and Corporate Change 2007 16(6):1037-1067; doi:10.1093/icc/dtm031
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© The Author 2007. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved.

"High performance" work practices, decentralization, and profitability: evidence from panel data{dagger}

Massimo G. Colombo, Marco Delmastro and Larissa Rabbiosi

Correspondence: Massimo G. Colombo, Politecnico di Milano, Department of Economics, Management, and Industrial Engineering, P.za Leonardo da Vinci, 32, 20133 Milan, Italy. e-mail: massimo.colombo{at}polimi.it

Correspondence: Marco Delmastro, Autorità per le Garanzie nelle Comunicazioni, Via delle Muratte 25,00187 Rome, Italy. e-mail: m.delmastro{at}agcom.it

Correspondence: Larissa Rabbiosi, Center for Strategic Management and Globalization, Copenhagen Business School, Porcelaenshaven 24, DK2000, Frederiksberg, Denmark. e-mail: lr.smg{at}cbs.dk

The aim of this article is to test the effects on firm profitability of the adoption of both "high performance" work practices (HPWPs) and changes in organizational design relating to the depth of the corporate hierarchy and the allocation of decision authority. For this purpose, we resort to panel estimates based on a longitudinal data set that includes information relating to 109 Italian manufacturing single-plant firms observed in the 1990s during 7 years. The econometric results show that the adoption of HPWPs leads to better performances, especially when it is associated with the delegation of decision authority downward the corporate hierarchy.


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