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Chapter 4

This document discusses organizational theories and structures that support innovation. It describes four main organizational theories - classical, behavioral, systems, and contingency approaches. It also outlines traits of innovative organizations and different ways to structure organizations for innovation, including separate innovation units, matrix structures, new venture divisions, virtual organizations, and boundaryless organizations. Finally, it discusses current trends and factors that influence organizational design decisions such as environmental, strategic, economic, and globalization considerations.

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124 views21 pages

Chapter 4

This document discusses organizational theories and structures that support innovation. It describes four main organizational theories - classical, behavioral, systems, and contingency approaches. It also outlines traits of innovative organizations and different ways to structure organizations for innovation, including separate innovation units, matrix structures, new venture divisions, virtual organizations, and boundaryless organizations. Finally, it discusses current trends and factors that influence organizational design decisions such as environmental, strategic, economic, and globalization considerations.

Uploaded by

nawabrp
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 4

Organizing for Innovation

OBJECTIVES
1. Describe organizational theories and structures
suitable for innovation.
2. Identify the traits of the innovation.
3. Know the factors influencing organizational
design for innovation.
Organizational Structure

1. Organization is a framework within which co-


ordination takes place for the accomplishments
of the goals.
2. Organizing is defined as a process of creating an
organization.
3. Organizational design is a process that involves
decisions about the key elements of
organization structure.
Organization Theories

Classical school
Behaviour school
System school
Contingency school
Classical school

Rationalization and division of work


Efficiency by specialization, co-ordination by rules,
productivity by rewards and co-operation.
Mechanistic structures like line and staff
Bureaucratic principles
Technology push innovations
Behaviour school

Human side of enterprise


Group processes
Market pull innovations
Project structures
System school

1. Organization as a sub-system interacting with large


environmental systems.
2. Proper alignment of : Strategy, structure, management
style, key management functions, decision making and
capabilities of human resources.
3. It identified issues like Adaptation, integration, co-
ordination, stress and strain.
Contingency school

Organic, flexible structures, absence of formality


and hierarchy.
Interactive model of innovation
Traits of innovative organizations
1. Growth orientation
2. Vigilance
3. Commitment to technology
4. Acceptance of risk
5. Cross functional co-operation
6. Receptivity
7. Slack: Managing innovation dilemma, provide room for
creativity.
8. Adaptability
9. Diverse range of skills
10. Enthusiasm of knowledge: Learning Organizations.
Organizing for innovation

1. Separate units for innovative activity:


Advantages:
• Commitment to innovation
• Innovation intelligence and research
• Focused efforts for innovation
• Generates innovations.
2. Project based organizations.
3. New venture divisions.
Matrix Organization

Mixture of project structure and functional


structure
Quasi -structure

Stable formal structure


Frequent reorganization
Participative changes
Temporary structures
New Venture Division

1. To locate radical innovations.


2. To pursue innovation with vigor.
3. To create innovative environment
NVD Vs. Operating Division
Dimensions NVD OD
Span of control Wide Narrow
Job descriptions Loose Detailed
Controls Loose Tight
Planning Frequency Frequent Infrequent
Planning Detail Low High
Time frames Long Short
Size of rewards Large Small
Compensation Deferred Current
Performance criteria Innovation and risk taking Current Profits
Virtual organization

Modular organization. Small core organization that


out sources major business functions.
Flexible.
Nike, Dell, Reebok.
Boundary less Organization

360 degree performance appraisal


Participative decision-making practices
Xerox, AT&T, Walmart, GE
Organizational Design
•Boundary Less
•Teams
•Empowerment

Organizational Culture
• Strong Mutual Relationships. Information Sharing
•Sense of community LEARNING • Open
•Caring ORGANIZATION •Timely
•Trust •Accurate

Leadership
• Shared Vision
•Collaboration
Current trends, factors influencing
organizational
design and size decisions
Environmental factors
Strategy Factors
Economic factors
Globalization factors
Environmental Factors
Strategy Factors

Innovation Mix
Diversification
Radical innovations
Economic Factors

Economies of scale
Infrastructure
Globalization Factors

Cross border teamwork


Use of info and communication technologies

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