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Knowledge Workers and Firm Capabilities

Author

Listed:
  • Mengus, Eric

    (HEC Paris)

  • Michalski, Tomasz

    (HEC Paris)

Abstract

Specialized knowledge-generating jobs comprise close to one fifth of employment and one fourth of the wage bill in French manufacturing firms. They are positioned high in the firm hierarchy, horizontally aside upper-tier managers but are not managerial in nature. This escapes the patterns implied by the hierarchy view of the firm. Conditioning on firm size and shares of management workers, their higher shares in employment at the firm level are correlated with more innovation and intangible capital, greater product complexity, higher revenue and quantity total factor productivity and profitability. This suggests that firms use specialized knowledge workers to generate within-firm knowledge and create firm capabilities. Consistently, we model firms as organizations where efficient production of higher-value added, complex goods requires information acquisition by within-firm knowledge workers to develop capabilities beyond those created by management and hierarchies.

Suggested Citation

  • Mengus, Eric & Michalski, Tomasz, 2023. "Knowledge Workers and Firm Capabilities," HEC Research Papers Series 1493, HEC Paris, revised 05 Feb 2024.
    • Handle: RePEc:ebg:heccah:1493
    DOI: 10.2139/ssrn.4328295
    Note: Available on SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4328295
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    More about this item

    Keywords

    firm organization; complexity; productivity; knowledge generation; capabilities;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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