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Andrew M. Pettigrew, OBE, FBA
Professor of Strategy and Organisation
Saïd Business School
University of Oxford
Presentation to Copenhagen Business School,
7th September 2011
The Rise, Fall and Regeneration of
Interest in the Field of Organisation
Design
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 117-
160
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
Danny Miller, Royston Greenwood and Rajshree Prakash (2009),
What Happened to Organization Theory? Journal of Management Inquiry, Vol. 18, No. 4, December, pp 273-270
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
Royston Greenwood and Danny Miller (2010), Tackling Design
Anew: Getting Back to the Heart of Organizational Theory, Academy of Management Perspective, November, pp 78-88
• WHAT IS ORGANIZATION DESIGN TODAY?
• WHY IS ORGANIZATION DESIGN IMPORTANT TODAY?
• WHY THE CONTINUING NEGLECT OF ORGANIZATION
DESIGN?
• MOVING FORWARD: SOME RECOMMENDATIONS
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
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
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.
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?
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
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
The primary questions
? Progress How far have new organisational forms been
implemented?
Performance ? What are the performance effects?
Process ? What are the managerial processes?
Research method
• Four surveys in:
• UK
• Continental Western
Europe
• Japan
• USA
• 18 Case studies in
• 8 UK
• 10 Continental
Western Europe
Progress and
performance
questions
Process
questions
The multiple indicators
processes
Horizontal
& vertical
communication
Invest
in I.T.
Practice
new HR
boundaries
Outsource Downscope
Develop
strategic
alliances
structures Decentralise
Project forms
of organizing Delayer
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?
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
Key Outputs
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?
European, Japanese and US
Comparisons 1992-1997
• 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 1992-
1997.
European, Japanese and US
Comparisons 1992-1997
• 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
1992-1997.
European, Japanese and US
Comparisons 1992-1997
• 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
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
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 co-
ordinated move
The Negative Proposition:
• Partial moves may drive down
performance
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”
Systemic change:
Europe, Japan and US, 1992-1997
The 3 Dimensions
Structure
Processes
Boundaries
The 4 Systems
System 1 (S+P+B)
System 2 (S+P)
System 3 (P+B)
System 4 (S+B)
Europe
30.3%
74.9%
44.9%
Europe
13.0%
25.1%
34.2%
16.4%
• Very few companies adopting whole system of change
Japan
6.2%
53.7%
30.7%
Japan
1.2%
4.7%
18.7%
1.6%
US
16.5%
82.3%
57.0%
US
8.9%
12.7%
46.8%
11.4%
One symbol, + or -, indicates weak positive or negative significance; two
symbols, ++ or --, indicate strong positive or negative significance.
Systemic change and performance:
Summary of regression results
The 4 Systems
System 1 (S+P+B)
System 2 (S+P)
System 3 (P+B)
System 4 (S+B)
Pooled Sample of
Western Firms
++
-
-
UK
+
--
-
US
+
--
• 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
Performance gains require
doing many practices
together
Performance effects depend
upon whole system
thinking and action
BP:Complementary Change & Performance 1990 – 1999
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
H O R TO N S I M O N B R O W N E
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
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