Since the 1980s we have witnessed a systematic fall in transportation, trade and information costs, which has had a significant impact on the degree of competition that firms face in product markets. How have firms adapted to those changes? This session will review the evidence on the effect of increases in competition, mainly resulting from “globalization” on the firms’ organizational choices including their choice of wages, incentives, the design of corporate hierarchies and management practices. We will also emphasize identification issues in obtaining credible results.