This paper develops a novel, geometric approach to modelling a firm's hierarchical structure.
We model the firm's hierarchy as the sector of a circle, in which the radius represents the
height of the hierarchy and the angle of the sector represents the width of the hierarchy. The
firm then chooses the height and angle in order to maximise profit. We analyse the impacts
of changes in economies of scale, input substitutability and labour productivity on the firm's
hierarchical structure. We find that the firm will unambiguously become more hierarchical as …

The purpose of this thesis is to determine what economic factors influence the hierarchical
structure of firms and how the hierarchy responds to a change in those economic factors. A
geometric approach is employed to model the firm's hierarchical structure. Specifically, the
sector of a circle is used to represent the shape of a firm's hierarchy. The height of the sector
represents the number of layers in a hierarchy and the angle of the sector represents the
span of control of a superior. The firm's production function is specified in terms of the height …