Category: Organizational Development ವ್ಯವಹಾರಿಕ ಉನ್ನತಿ

In the last blog we talked about the evolutionary model of organization and the sort of innovation that would accompany it. In today’s blog we discuss how the organization’s model of growth when modeled around the punctuated equilibrium would handle innovation. 

The punctuated equilibrium model proposes that organizations typically initiate a revolutionary structural change during periods of environmental turbulence. The general state of an organization would comprise of long periods of evolutionary change with certain short bursts of radical change. These short bursts of change could really transform the organizations strategy, structure, power distribution, control systems etc!

One could call the relatively stable period of growth as – “evolutionary periods” while the short radical changing periods as those of “revolutionary periods”. 

Empirically it has been found that the organizations that were able to transform themselves drastically were able to perform better than those that transformed incrementally. But this study wasn’t comprehensive enough to allow us to understand the reason of the failed transitions. The implication of the concept is that the competitive environment repeatedly changes over time and the successful organizations accordingly have to initiate periodic discontinuous or revolutionary change to adapt to the environmental changes.  

The challenge here is that the organization would have to develop diverse competencies and capabilities to shape and deal with the technology cycle.

While this model explains the patterns of organizational evolution and relationship with the change well, the model fails to address the crucial question of how organizations create manifest into new forms during the revolutionary phases. It also doesn’t address the long terms survival prospects of the organization!

In the last blog, we looked at the affect of market economies on the organization’s structure and there by the innovation – knowledge sharing perspective. Over the last few blogs we have covered 2 dimension of the study of organizational innovation – its relation with organization structure and its relation with organization knowledge creation & learning. Starting from today, over the next few blogs we attempt to understand the relation between organizational change and the innovation there in.

If one where to begin the journey of understanding the relation between the ways an organizational change we would first have to understand the process or perception of the way organizations change itself. It is pretty clear that organizational change happens in response to the environmental challenges or technology changes. Management theorists have classified the study of organizational adaptation and change into 3 categories

We shall dwell into these individual streams over the next few blogs.

In the last blog, we looked at a short case where a new concept – Spaghetti Organization was discussed. In today’s blog we look at the societal institutions influence the organization form and its innovative ability.

We have discussed 2 forms of organization in pretty detail with respect to the organization’s innovative ability – The J Form and the Adhocracy. We also mentioned that organizations were said to be of J form given the structure followed in Japan. However we would require to broaden the horizon from Japan and ask if there is a larger social context that drives such organization structure. While understanding Adhocracy too we used the example of Silicon Valley to talk about labor market which is a component of society!

Research has indicated that there is a relation between the type of “capitalism” and the innovation stype persued. If we could classify the capitalistic economies into 

we begin seeing some patterns. CME and LME differ from one another in labor market organization, training systems, soceital norsm, values governing business and economic relationships.

CME is followed in countries like Japan, Germany etc. These have deleveoped institution that encourage long-term employment and business relationships, facilitating the delevopment of distinctive organizational comepetencies conducince to continuous but incremental innovation. LMEs on the other hand, are follwed in contries like the US and the UK, where a certain type of adhocracy is followed to be able to rapidly and radically innovate. It is not just the labor markets that aid these types of organization structures – the financial markets, education systems etc too play a major role. 

What one needs to remember is that the relation between instutions, organization and innovation are more complex than the simpified difference between the J-Form and Adhocracy. they are more dependent on the social context and the institutional framework that is developed. Infact the societal institutions play the dual role of creating constraints and also possibilities for the firm to evaluate the type of oganization they could evlove into

In the last blog, we looked at the Silicon Valley format of organizations and the related organizational learning. In this blog, we look at a unique experiment that was conducted in an organization – Oticon and the resultant term that developed called – Spaghetti Organization

Spaghetti Organization refers to a flat, loosely coupled, project based organization characterized by ambiguous job boundaries and extensive delegation of task and project responsibilities to autonomous teams. Let’s understand this with the example of Oticon.

Oticon is a Danish electronics producer operating in the space of hearing aids. It became extensively known for its s radical organizational transformation in the early 1990s. The organization was traditionally hierarchical, functional based organization, and transformed radically into a “Spaghetti Organization”. It was the loss of competitive advantage in the 1980s that forced it to get into implementing this model. The advent of the digital technology had almost spelt doom on this organization. In response to this, this company underwent extensive restructuring in the 1990s – the aim was to have an entrepreneurial and creative organization. This resulted in a series of remarkable innovations in the 1990s. However, this form of organization was abandoned in 1996.

A research by Foss suggests that the reason could be the severe problems encountered in coordination and knowledge sharing due to a highly fluid and adhocratic nature of the project assignments. Employee’s commitment to the project was also another point to ponder about. Foss also argues that, the form of organization was an “internal hybrid” between elements of market autonomy and flexibility in hierarchy. It was also inherently unstable due to the motivational challenges caused by the selective intervention by the top management into project selection and coordination. The employee frustration seen due to this could have been the cause for eventual retreat of Oticon from the radical and celebrated Spaghetti Organizational model.

In the last blog, we attempted understanding the J-Form of organization better. In today’s blog we look at the Silicon Valley style of organization (closer in alignment with the Adhocracy concept) and see how Adhocracy has been leveraged.

The Silicon Valley has been a very dynamic and successful region where rapid innovation and commercialization of fast growing technologies. The majority of the industries in this region are microelectronics, semiconductors, computer networking, and biotechnology. These industries are characterized by frequent reconfiguration and realignment of the firms to survive a constantly changing environment spurred by innovation. There is a large pool of professional experts with known reputations in particular fields that enable the firms to quickly reconstitute their knowledge and skill base in the course of their innovative endeavors. There is high mobility of the labor force that enables not just the culture of hiring and firing, in addition when combined with the professional networks this enables rapid transmission of evolving new knowledge, – this might mostly be tacit though!.

The shared context and industry specific values ensure that the tacit knowledge is not wasted when one shifts form one organization to the other! This inherently encourages the individual to engage actively in this tacit “know-how” that he could leverage for himself. Though regional, this stability is critical to offer the sustaining of collective learning and knowledge creation within and across the firm boundaries.

Now if we were to generalize this Silicon Valley culture in terms of Adhocracy – it could be seen as an organic and adaptive form of organization that fuses the professional expertise with various knowledge and skills into adhoc project teams for solving complex and typically uncertain problems. Careers of these professionals are structured around a series of discrete projects than a firm level growth. This indicates that the organizational boundaries are pretty permeable and allow for the insertion of new ideas and knowledge from outside – through recruitment of new staff into the firm. 

The strength of Adhocracy is in being able to reconfigure the knowledge base quickly deal with high technical uncertain problems – this in many ways enable innovation in emerging new industries. They are capable of dynamic learning and radical innovation, however this model is not without its share of challenges – the toughest amongst this is that of knowledge accumulation at an organizational level.

In the last blog, we began a discussion on the relation between organizational learning and organization structure. We continue this discussion today to better understand the J-Form of organizational structures.

In order to really understand the source for success of J-Form of Organizations in innovation and learning, it would be good to begin with the larger economy and drill deeper into an organization.

Japanese economy is generally characterized by high level of cooperation and organizational integration. There exists extensive long-term collaboration of firms in business groups and networks. The smaller firms are very well integrated with the larger firms.

The knowledge embedded in organizational routines, team relationships and shared culture are what form the basis of the innovative capacity of the J-Form organizations. The shop-floor skills in problem solving, intensive interaction and knowledge sharing across different functional units create an “organizational community” which drives Learning and Knowledge Creation. New Knowledge is formed the fusion, synthesis and combination of the existing knowledge base. 

The J-Form of organizations tends to develop an orientation towards incremental innovation as a strategy and generally perform well in relatively mature technology fields characterized by rich possibilities of combinations and incremental improvements to existing products or components. The focus is on nurturing organizationally embedded, tacit knowledge and it emphasizes continuous improvement in such knowledge. This approach however has been found to be not as effective when dealing with radically innovative platforms where the knowledge might have to gain knowledge from external sources. 

The success of Japanese firms in mature industries like – automobile, electronics etc and it’s not so good performance in areas like software and biotechnology are what we could related to.

In the last blog we continue the discussion on the challenges that are faced in creating a system for organizational learning. In today’s blog we try to understand the link between organization structure and organizational learning. 

To understand the relation between structure and organizational learning, it would be extremely useful if we could put the forms of organizational structures on a continuous spectrum. At one end would be Adhocracy (Recollect from this blog the classes of organization by Mintzberg) where we have find the organization structure cutting across the normal structure lines of the organization to exploit the opportunities and solve problem. At the other end one could imagine a very “Japanese Organization” (J Form) where in formal teams etc exists and the learning is more of a cumulative exercise. 

J-Form of Organization does comprise of organizations that are good at cumulative learning, the innovativeness of these organizations is designed by the organization specific collective competencies and problem solving routines. 

Adhocracy – relies more on individual expertise organized in flexible market oriented project teams the individual expertise enables the organization to respond quickly to changes in knowledge and skills and integrating new kinds of expertise to generate radical new products and processes.

Understanding each of these would require a separate blog, so we just initiate the discussion today and would continue it over the next few blogs.

In the last blog, we looked at some of the definitions in the context of organizational knowledge creation. In today’s blog we begin understanding the challenge of how the organization would have to balance the system when creating a process for organizational learning.

Organizational learning requires the organization to keep a sufficiently porous boundary that would allow the “flow” of new knowledge and ideas into the organization yet keep a strict internal focus for building on its current expertise. The fundamental issues for the organization at this point is that through existing processes they have a completely certain environment to explore, while the future for the organization lies only in exploring the new possibilities beyond what has been established already.

If one is to ask why the organization should allow external ideas into the current organizational learning, well here is an answer – Knowledge creation is a product of organization’s capability to recombine existing knowledge and generate new applications from this existing base. However, radically new learning tends to arise from contacts outside the organization. These external contacts could be in the form of business alliances, network relationships, as well as new personnel into the company. 

To sustain in the long run, organizations would have to “creatively destruct” that would allow them develop firm-specific capability and renew or reconfigure its competencies to address environmental challenges. This balance between exploitation of certainty and exploration of the future is a continuous challenge that requires a very good balance and coordination to be successful for the organization.

In the last blog we looked at concept of “context” in organizational knowledge creation. In today’s blog we continue understanding these terms and also learn a few new terms in the process.

It is always good to understand and look at an organization as a cognitive enterprise that learns and develops knowledge. In this direction there are some interesting terms that have been coined by management theorists. Understanding these is quite intuitive:

Organizational Knowledge: This term refers to the shared cognitive schemes and distributed common understanding within the firm that facilitate knowledge sharing and transfer

Organization Routines: A kind of collective knowledge rooted in shared norms and belief that aids joint problem solving and capable of supporting complex pattern of action in the absence of written rules

Core Competency: Implies that learning and knowledge creation activities of a firm tend to be cumulative and path dependent.

While all these talk about how organizations are learning environment, it is also true that in some cases, the same earning could be difficult to unlearn past practices and explore alternative ways of doing things – this many a times leads to what some management experts call as “competency trap”.

At this point again it would be interesting to reiterate the importance of decision making in management. There is an inherent difficulty when organizations try to learn – to draw the boundary between external and internal knowledge flows is extremely crucial. We shall continue to discuss this in the next blog and it is pretty interesting to understand this.