17 Nov 2011  Sharpening Your Skills

Organizational Design

In this collection from our archives, Harvard Business School faculty discuss specific challenges that can be solved with the right organizational design.

 

Questions to be answered:

  • What are the best techniques for fostering innovation in multicultural teams?
  • I want my functional experts to influence high-level strategy.
  • How can managers get the best thinking out of support staff?
  • What role does information technology have in promoting a decentralized organization?

What are the best techniques for fostering innovation in multicultural teams?

Innovating at the World's Crossroads: How Multicultural Networks Promote Creativity

HBS professor Roy Y.J. Chua proposes that cultivating a culturally diverse social network helps improve creative problem solving in a multicultural context because it promotes a flow of novel ideas and concepts from cultures other than one's own. New ideas from other cultures can serve as raw materials for recombination or stimulate new thoughts. Combining social network analysis and experimental methods, this research investigates the effects of multicultural networks on individuals' creative performance, identifying when this effect arises, as well as underlying mechanisms. Key concepts include:

  • The more your network includes individuals from different cultural backgrounds, the more you will be creatively stimulated by different ideas and perspectives. Importantly, these ideas do not necessarily come from the network members who are culturally different from you.
  • Chua's experimental research found that cultural heterogeneity induced creativity for tasks that required the use of varied cultural knowledge resources. But for other types of tasks, cultural heterogeneity had no effect on creative performance.
  • The research is relevant to business practitioners because creating a multicultural workplace is often touted as a strategy to foster organizational creativity. While this is sometimes effective, managers still need to seek other drivers of creativity.

I want my functional experts to influence high-level strategy

Moving From Bean Counter to Game Changer

New research by HBS professor Anette Mikes and colleagues looks into how accountants, finance professionals, internal auditors, and risk managers gain influence in their organizations to become strategic decision makers. Key concepts include:

  • Many organizations have functional experts who have deep knowledge but lack influence.
  • They can influence high-level strategic thinking in their organizations by going through a process that transforms them from "box-checkers" to "frame-makers."
  • Frame-makers understand how important it is to attach the tools they create to C-level business goals, such as linking them to the quarterly business review.
  • Frame-makers stay relevant by becoming personally involved in the analysis and interpretation of the tools they create.

How can managers get the best thinking out of support staff?

Managing the Support Staff Identity Crisis

Employees not connected directly to profit and loss can suffer from a collective "I-am-not-strategic" identity crisis. Professor Ranjay Gulati suggests that business managers allow so-called support function employees to become catalysts for change. Key concepts include:

  • Marketers, human resources managers, finance managers, and other so-called support function employees often have trouble defining their worth because their jobs are not directly tied to profit and loss—which is how companies often gauge success.
  • As such, they tend to view themselves as overhead, and they paradoxically try to justify their existence by falling into adversarial policing roles in an attempt to cut costs for the company.
  • Business managers should encourage these employees to view themselves not just as support functions that police other departments but as catalysts for new ideas and company growth.

What role does information technology have in promoting a decentralized organization?

How IT Shapes Top-Down and Bottom-Up Decision Making

What determines whether decisions happen on the bottom, middle, or top rung of the corporate ladder? New research from professor Raffaella Sadun finds that the answer often lies in the technology that a company deploys. Key concepts include:

  • Enterprise Resource Planning software is a decentralizing technology: It provides information that enables lower-level managers to make more decisions without consulting their superiors.
  • By the same token, Computer-Assisted Design and Computer-Assisted Manufacturing software creates a situation in which the plant worker needs less access to superiors in order to make a decision.
  • The better the data network, the easier it is for workers to lean on superiors and rely on them to make decisions. It's also easier for executives to micromanage and keep all the decisions in the corporate office.
  • Trust is also a key factor in determining whether decisions are centralized at headquarters or decentralized at the local level. Research finds that the average level of trust of a multinational's home country tends to influence the level of decentralization in that company.