In a wonderful paper , Maria Guadalupe of Columbia University and Julie M. Wulf of Harvard Business School provide quantitative evidence that ...
when competition increases the value of quick and responsive decision-making, firms eliminate layers to improve the quality and speed of the transmission of information or increase the authority of division managers to become more adaptive to local information.
The researchers used data surrounding international agreements to eliminate trade barriers, since those moments offer a crucible in which changes in competition are more absolutely and relatively pronounced; but, their observations are much more broadly applicable. If flatter organizations are observed in the aftermath of step-function increases in competitive intensity, then just as Darwin taught us regarding biologically utilitarian adaptation, we can infer that flatness conveys a competitive advantage.
Order up: Pancakes.
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