The Rise, Fall and Regeneration of Interest in the Field of Organisation Design

Transcription

1 The Rise, Fall and Regeneration of Interest in the Field of Organisation Design Andrew M. Pettigrew, OBE, FBA Professor of Strategy and Organisation Saïd Business School University of Oxford Presentation to Copenhagen Business School, 7 th September 2011

2 George P. Huber (2011), Organizations: Theory, Design, Future, Chapter 5 in APA Handbook of Industrial and Organizational Psychology, (Ed.) Sheldon Zedeck, APA, Washington DC, pp ORGANIZATION THEORY Population Ecology and Evolutionary Theory Institutional Theory Resource Dependency Theory Transaction Costs Theory Contingency and Congruence Theory Network Theory Strategic Choice Theory Critical Management Theory Post Modern Theory ORGANIZATION DESIGN ORGANIZATIONS IN THE FUTURE

3 Danny Miller, Royston Greenwood and Rajshree Prakash (2009), What Happened to Organization Theory? Journal of Management Inquiry, Vol. 18, No. 4, December, pp THE IMPORTANCE OF ORGANIZATION DESIGN DESIGN IN TODAY S ORGANIZATION THEORY RESEARCH RECOMMENDATIONS Embrace richness and complexity in our studies Respect differences in organizational types Use time as a searchlight Study interdependencies among design elements Study more types of organization and contexts

4 Royston Greenwood and Danny Miller (2010), Tackling Design Anew: Getting Back to the Heart of Organizational Theory, Academy of Management Perspective, November, pp WHAT IS ORGANIZATION DESIGN TODAY? WHY IS ORGANIZATION DESIGN IMPORTANT TODAY? WHY THE CONTINUING NEGLECT OF ORGANIZATION DESIGN? MOVING FORWARD: SOME RECOMMENDATIONS

5 The Three Conclusions The need for empirical studies which progressively map the contours of change in organizational form and process The need to commit programmatic resources to map changes in organization design within and across nations and regions Studies linking organizational design choices and changes to performance which generate What To and How To knowledge

6 Contextualizing Organization Design The era of universal organizational forms The rise and persistence of the contingency studies and the contingency idea Absence of related theories of choice, change and learning The easy slip into the rhetoric of design Design and performance deeply embedded in industrial economics Exporting the American way of management: Marshall and McKinsey The social sciences make America the universal pattern

7 Contextualizing Organization Design The strategy-structure preoccupation, but rebalancing over time The promise of configuration, but complementarities has the edge Organization design sidelined by academia, but innovative practitioners maintain interest and momentum 1980 s new focus on choice, change, process, culture, power and politics, networks and inter-organizational relations 1990 s revitalization of field with rise of new context, new competition and new forms of organization New forms place structure and design back stage and strategy and process front stage.

8 Contextualizing Organization Design The interest in dynamism and the linguistic turn from organization to organizing The challenges of holism, complementarities thinking and action and divergent forms of capitalism The now real challenge of business and society Power Legitimacy Responsibility Governance Regulation of the modern corporation What are the links with organization design?

9 New Forms of Organization: 4 Themes Greater permeability of organization boundaries, the development of networks, webs, co-operative relations, alliances and clusters Compressing the structural and cultural features of hierarchy through delayering, downsizing, and building more co-operative forms of managerial style Associated drives to develop more creative, agile, learning forms (competition as an innovation contest) The linguistic turn from organization to organizing

10 Examples of New Forms The N Form or Network Form The Horizontal Corporation The Boundaryless Organization The Cellular Form The Federal Form The Virtual Organization The Learning Organization The Web

11 Progress The primary questions? How far have new organisational forms been implemented? Performance? What are the performance effects? Process? What are the managerial processes?

12 Research method Four surveys in: UK Continental Western Europe Japan Progress and performance questions USA 18 Case studies in 8 UK 10 Continental Western Europe Process questions

13 Three dimensions of change changing structures changing processes changing boundaries

14 The multiple indicators Decentralise structures Delayer Project forms of organizing processes Horizontal & vertical communication Invest in I.T. Practice new HR Outsource Develop strategic alliances Downscope boundaries

15 Progress/Mapping Questions 1. Over the limited time period was there any evidence of major changes in forms of organizing? 2. If change was occurring was it uniformly evident across structures, processes and boundaries? 3. Was there parallel change, convergent, or divergent change across the 3 nations/regions? 4. Was there evidence of differential pace of change, albeit from different starting points? 5. Were new forms supplementing or supplanting existing organizational and managerial practices?

16 Key Outputs The Innovating Organization (Eds) Andrew Pettigrew and Evelyn Fenton London, Sage, 2000 Innovative Forms of Organizing: An International Perspective (Eds) Andrew Pettigrew et al. London, Sage, 2003

17 Convergence/Divergence Debate Do managerial practices (including forms of organizing) reflect the nation state institutional configurations within which firms are embedded? Are there variations in the tightness of interaction or coupling of such institutional arrangements which provide more or less receptive contexts for ideas and imitation from the international competitive system?

18 European, Japanese and US Comparisons Overwhelming Finding Common direction of change, but from different starting point and some variation in pace across the 3 regions. Evidence of parallel organizational change, but little evidence to support the thesis that firms are converging towards: A Single Type Or Set of Organizational Practices Across the 3 regions is greater evidence of boundary and process changes than structure changes in the period

19 European, Japanese and US Comparisons Incremental and Radical Change Was Assessed European and US firms show much higher percentage of radical change compared with their Japanese comparators over the time period of

20 European, Japanese and US Comparisons The results do not confirm previous conjecture about revolutionary change in forms of organizing. New forms of organizing are emerging across the 3 regions, but they are supplementing not supplanting existing forms. For our European and US samples: Operational and Strategic Decentralization Alliance Formulation were positively and significantly related to: Knowledge Intensity AND Extent of Internationalization of the Firm

21 What are the benefits of complementary changes?

22 Strategic complementarities Doing more of one thing increases the returns of doing more of another Milgrom and Roberts, 1995 Investing in one practice makes more profitable investing in another, setting off a potential virtual circle of high performance

23 Two key propositions The Positive Proposition: Changing only a few of the system elements at a time may not come close at all to achieving all the benefits that are available through a fully coordinated move The Negative Proposition: Partial moves may drive down performance

24 Measuring performance High performance companies are: Upper quartile of sector adjusted return on capital employed or Answered a lot higher to How would you assess the financial performance of this company compared with other companies in our sector

25 Systemic change: Europe, Japan and US, The 3 Dimensions Europe Japan US Structure 30.3% 6.2% 16.5% Processes 74.9% 53.7% 82.3% Boundaries 44.9% 30.7% 57.0% The 4 Systems Europe Japan US System 1 (S+P+B) 13.0% 1.2% 8.9% System 2 (S+P) 25.1% 4.7% 12.7% System 3 (P+B) 34.2% 18.7% 46.8% System 4 (S+B) 16.4% 1.6% 11.4% Very few companies adopting whole system of change

26 Systemic change and performance: Summary of regression results The 4 Systems Pooled Sample of UK US Western Firms System 1 (S+P+B) System 2 (S+P) System 3 (P+B) System 4 (S+B) One symbol, + or -, indicates weak positive or negative significance; two symbols, ++ or --, indicate strong positive or negative significance. The adoption of a full set of changes (System 1) increases the probability of improving corporate performance The adoption of partial systems (System 2 and System 3) is likely to reduce performance

27 Performance gains require doing many practices together Performance effects depend upon whole system thinking and action

28 Two big issues Transition Issue: Perils of the J-Curve Complementarities Traps

29 BP:Complementary Change & Performance H O R TO N S I M O N B R O W N E

30 The Dangers of Transitions and the Perils of the J-Curve Performance Extent of Change over Time Things may get worse before they get better Need for strong leaders to survive transition processes

31 The Three Conclusions The need for empirical studies which progressively map the contours of change in organizational form and process The need to commit programmatic resources to map changes in organization design within and across nations and regions Studies linking organizational design choices and changes to performance which generate What To and How To knowledge

32 Thank you for listening Questions and discussion?