Organizational Design of Analyst Teams: Implications for Performance

Title: Organizational Design of Analyst Teams: Implications for Performance

Abstract: I examine the effect of organizational design on productivity. I argue that team design matters for performance and is determined by coordination costs. Using a sample of about 550,000 sell-side forecasts from 2005 till 2022, I measure organizational design based on analysts’ registrations with FINRA. I determine firm-level characteristics that matter for team design and show that design varies within and across brokerage houses. Further, I provide evidence that team design affects labor outcomes. Exploiting within-team variation in organizational design, I find that team design matters for productivity (i.e., timelier and accurate forecasts). Overall, the results enhance the understanding of teams' internal organization design.