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Organizational DesignRemove Organizational Design →

New research on organizational design from Harvard Business School faculty on issues around the relationship between organization design and corporate identity, how to manage dueling missions, and improving operational performance.
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The Effects of Hierarchy on Learning and Performance in Business Experimentation

by Sourobh Ghosh, Stefan H. Thomke, and Hazjier Pourkhalkhali

Do senior managers help or hurt business experiments? Analyzing a dataset of more than 6,300 experiments on the A/B/n testing platform Optimizely, this study suggests that involving senior executives in experimentation teams can have surprising consequences.

Open Your Organization to Honest Conversations

by Dina Gerdeman

When company leaders can't hear the voices of their workers, serious strategic mistakes are likely. Michael Beer discusses ways organizations can build powerful communication channels. Open for comment; Comment(s) posted.

How Does a Company like Boeing Respond to Intense Competitive Pressure?

by James Heskett

SUMMING UP: Playing out in real time, Boeing's misguided responses to competitive pressure illustrate organizational "gaps" suffered by many organizations. James Heskett's readers discuss solutions. Open for comment; Comment(s) posted.

Design Rules, Volume 2: How Technology Shapes Organizations series

by Carliss Y. Baldwin

Building on Design Rules: The Power of Modularity, coauthored by HBS professor Carliss Y. Baldwin and Kim B. Clark (MIT Press, 2000).

Vodafone’s Innovative Approach to Advanced Technologies

William Kerr discusses how telecom giant Vodafone incorporated big data, automation, and artificial intelligence to improve productivity while ensuring new opportunities were created for the next generation of workers. Open for comment; Comment(s) posted.

Turbulence, Firm Decentralization and Growth in Bad Times

by Philippe Aghion, Nicholas Bloom, Brian Lucking, Raffaella Sadun, and John Van Reenen

What makes some firms more resilient than others to large negative macro shocks? This paper finds that the internal organization of firms—specifically, the extent to which decision-making is decentralized from headquarters to plant managers—is an important mediating factor through which macroeconomic shocks affect firm performance and, ultimately, growth.

Explaining the Vertical-to-Horizontal Transition in the Computer Industry

by Carliss Baldwin

This paper shows how the vertical-to-horizontal transition in the computer industry was an organizational response to a change in economic rewards brought by the competing technologies of rationalized step processes and open platform systems. The spread of modular architectures—and the rapid pace of change in semiconductor technology—shifted the balance of rewards away from predictability toward flexibility.

How Much Bureaucracy is a Good Thing in Government and Business?

by James L. Heskett

SUMMING UP: Bureaucracies aren't by nature bad, but they aren't necessarily built for crisp decision making, either. James Heskett's readers debate the need for bureaucrats. Open for comment; Comment(s) posted.

‘Does 'What We Do' Make Us 'Who We Are'? Organizational Design and Identity Change at the Federal Bureau of Investigation

by Ranjay Gulati, Ryan Raffaelli, and Jan Rivkin

Both the design and identity of the FBI changed greatly in the wake of the September 11, 2001 terrorist attacks. This study tracing the co-evolution of the Bureau’s organizational design and identity before the 9/11 attacks and through three subsequent phases finds that successful changes to organizational identity are likely to be delayed after a radical external shock: Management is likely to be constrained, appropriate design is probably unclear, or both.

Why Do Leaders Get Their Timing Wrong?

by James Heskett

SUMMING UP: Is good management timing primarily a function of strategy or culture? James Heskett's readers add their opinions. What do YOU think? Open for comment; Comment(s) posted.

What to Do When Your Organization Has Dueling Missions

by Carmen Nobel

It’s no easy feat to manage hybrid organizations, which combine the social mission of a nonprofit with the revenue model of a for-profit business. Julie Battilana and colleagues explain how hybrids can find success with a business model dubbed “spaces of negotiation.” Open for comment; Comment(s) posted.

Self-Interest: The Economist's Straitjacket

by Robert Simons

Research explores the downsides of self-interest on businesses, government, and the economy as a whole.

What's Wrong With Amazon’s Low-Retention HR Strategy?

by James Heskett

SUMMING UP Does Amazon's "only the strongest survive" employee-retention policy make for a better company or improved customer relationships? Jim Heskett's readers chime in. Open for comment; 0 Comment(s) posted.

Is the Time Right for Self-Management?

by James Heskett

SUMMING UP When and where will holacracy, also known as self-management, work best? James Heskett's readers are conflicted as they respond to Zappos.com's radical adoption of the less-is-more management structure. What do YOU think? Open for comment; 38 Comment(s) posted.

Need to Solve a Problem? Take a Break From Collaborating

by Carmen Nobel

Organizations spend a lot of money enabling employees to solve problems collectively. But inducing more collaboration may actually hinder the most important part of problem-solving: actually solving the problem. Research by Jesse Shore, Ethan Bernstein, and David Lazer. Open for comment; 11 Comment(s) posted.

Bottlenecks, Modules and Dynamic Architectural Capabilities

by Carliss Y. Baldwin

Large technical systems made up of many interoperable components are becoming more common every day. Many of these systems, like tablet computers, smartphones, and the Internet, are based on digital information technologies. Others, like the electrical grid, the financial payments system, and all modern factories, rely on digital technologies. How do firms create and capture value in large technical systems? To answer this question, the author argues, it is first necessary to develop ways of describing such systems. One useful lens is architecture. Architectural capabilities are an important subset of dynamic capabilities that provide managers with the ability to see a complex technical system in an abstract way and change the system's structure by rearranging its components. Purposeful architectural change can then be used to create and capture value at different points in the technical system. Furthermore, value-enhancing architectural change arises through the effective management of bottlenecks and modules in conjunction with the firm's organizational boundaries and property rights. Key concepts include: Bottlenecks are points of value creation and capture in any complex man-made system. The architecture of a system defines its components, describes interfaces between components, and specifies ways of testing performance. The tools a firm can use to manage bottlenecks are 1) an understanding of the modular structure of the technical system and how it can be changed; and 2) an understanding of the contract structure of the firm, especially its organizational boundaries and property rights. Closed for comment; 0 Comment(s) posted.

Chief Sustainability Officers: Who Are They and What Do They Do?

by Kathleen Miller & George Serafeim

A number of studies document how organizations go through numerous stages as they increase their commitment to sustainability over time. However, we still know little about the role of the Chief Sustainability Officer (CSO) in this process. Using survey and interview data, the authors of this paper analyze how CSOs' authority and responsibilities differ across organizations that are in different stages of sustainability commitment. The study documents the increased authority that CSOs have in companies that are in more advanced stages of sustainability. But while CSOs assume more responsibilities initially as the organization's commitment to sustainability increases, CSOs decentralize decision rights and allocate responsibilities to the different functions and business units. Furthermore, the authors document that a firm's sustainability strategy becomes significantly more idiosyncratic in the later stages of sustainability, a factor that influences significantly where in the organization responsibility for sustainability issues is located. The study also reflects on the best avenues for future research about CSOs and transformation at the institutional, organizational, and individual levels. This article is a chapter of the forthcoming book Leading Sustainable Change (Oxford University Press). Key concepts include: As a CSO gains more authority, she becomes less central in in the organization by allocating decision rights and responsibilities to the functions and business units. While most companies have fairly generic sustainability strategies in the initial stages, it is in the latter Innovation stage that different organizations more closely customize their sustainability strategy to the needs of the organization. The sustainability strategy is driven by the demands of the markets where an organization has a presence or plans to expand in the future. Closed for comment; 0 Comment(s) posted.

Managing the Family Business: Entrepreneurs Needed for Long-Run Success

by Michael J. Roberts

Families that want to stay in business for generations don't have a choice but to encourage entrepreneurship in and out of their family company, say Michael Roberts and John Davis. Here's how. Open for comment; 2 Comment(s) posted.

Fixing the ‘I Hate Work’ Blues

by Bill George

Many employees report they are overworked and not engaged—a recent New York Times article on the phenomenon was titled, "Why You Hate Work." The problem, says Bill George, is that the way we design work stifles engagement. Here's the fix. Closed for comment; 20 Comment(s) posted.

Facts and Figuring: An Experimental Investigation of Network Structure and Performance in Information and Solution Spaces

by Jesse Shore, Ethan Bernstein & David Lazer

How can managers create organizations that bring people together to successfully solve problems? One increasingly popular managerial tactic to improve problem-solving performance is to increase the connectedness, or what academics call clustering, of the organization. Using everything from transparent, open offices to open social collaboration platforms, connecting everyone and everything, the theory goes, will produce better solutions. True or false? In the lab, the authors randomly assigned individuals to 70 sixteen-person organizations—some more clustered than others—and asked each organization to solve a complex problem: divine the who, what, where, and when of an impending terrorist attack (akin to the famous Clue® whodunit game). They did so using a platform not unlike real intelligence problem-solving environments: Through their computers, individuals could search for information, share information with each other, and share theories about the solutions, while the platform tracked all behavior. The results? Connectedness had different effects on the "facts" and "figuring" stages of problem solving. Search for information (facts) was, indeed, more efficient the more connected the organization. But performance in interpreting the information (figuring) to develop solutions was undermined by too much connectedness. The same connections that helped individuals coordinate their search for information also encouraged individuals to reach consensus on less-than-perfect solutions, making connectedness a true double-edged sword. The authors conclude with a discussion of implications for both theory and practice in our increasingly connected 'small world' and suggest directions for future research. Key concepts include: Problem solving requires two important and complementary forms of search: searching for information (for the facts that may be important pieces of the puzzle) and searching for solutions (for theories that combine puzzle pieces into an answer). The same network structure can promote or inhibit knowledge diversity, depending on whether that knowledge consists of information, or interpretations of information. 'Good' communication structures may only be good for parts of the process of collective problem solving: structures that are good now may be bad later. Organizations might be wise to adopt different communications structures for different phases of collective problem solving. Rather than allow the march of technology to dictate organizational performance, it is possible to imagine how technology could be harnessed to achieve different performance goals. Closed for comment; 0 Comment(s) posted.