Danish Research Unit

This study makes use of the results of a postal questionnaire sent to a sample of large private sector companies in Britain and France to address two key issues in the new institutional analysis of the firm. The first is the way the institutional environment supports and constrains the design of firm-level organisational devices and governance mechanisms. The second concerns the relation between the introduction of new organisational methods and the firm’s innovative capacity. Multiple correspondence analysis is used to describe the relation between the use of innovative work methods and pay policies. The analysis shows that the policies of the British sample of firms display greater ‘coherence’ than those of the French sample, in the sense that a more intensive use of the new organisational methods is more consistently associated with a more intensive use of the new pay policies. Ordered logit regression analysis shows that UK firms with positive expenditures on R&D are more likely to introduce new organisational methods than those not making such expenditures. This relation between the use of new organisational methods and investments in innovative capacity are not confirmed for the French case.