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Organization Design and Effectiveness over the Innovation Life Cycle

Author

Listed:
  • George Westerman

    (MIT Sloan School of Management, 3 Cambridge Center NE20-336, Cambridge, Massachusetts 02142)

  • F. Warren McFarlan

    (Harvard Business School, Soldiers Field Road, Boston, Massachusetts 02163)

  • Marco Iansiti

    (Harvard Business School, Soldiers Field Road, Boston, Massachusetts 02163)

Abstract

Differing bases of competition in early and later stages of an innovation’s life cycle call for differing organization designs. Designs that fit early strategic contingencies tend to misfit later ones. Over time, innovating units must either minimize the negative effects of misfit, or make difficult changes in design. Using four paired case studies, we examine how firms address conflicts in strategic contingencies, how managers adjust to misfits, and how organizations adapt their designs. We find that firms use one of three adaptation modes, none of which is fully autonomous nor fully integrated, and all of which change over time. Each mode optimizes for one contingency while suboptimally attempting to address the other. The study suggests practical insights for researchers and managers.

Suggested Citation

  • George Westerman & F. Warren McFarlan & Marco Iansiti, 2006. "Organization Design and Effectiveness over the Innovation Life Cycle," Organization Science, INFORMS, vol. 17(2), pages 230-238, April.
    • Handle: RePEc:inm:ororsc:v:17:y:2006:i:2:p:230-238
    DOI: 10.1287/orsc.1050.0170
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    References listed on IDEAS

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    Cited by:

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    6. Hyojung Kim & Namgyoo Park & Jeonghwan Lee, 2014. "How does the second-order learning process moderate the relationship between innovation inputs and outputs of large Korean firms?," Asia Pacific Journal of Management, Springer, vol. 31(1), pages 69-103, March.
    7. Hendry, Chris & Harborne, Paul, 2011. "Changing the view of wind power development: More than "bricolage"," Research Policy, Elsevier, vol. 40(5), pages 778-789, June.
    8. Sahi, Gurjeet Kaur & Gupta, Mahesh C. & Cheng, T.C.E., 2020. "The effects of strategic orientation on operational ambidexterity: A study of indian SMEs in the industry 4.0 era," International Journal of Production Economics, Elsevier, vol. 220(C).
    9. Clayton M. Christensen & Rory McDonald & Elizabeth J. Altman & Jonathan E. Palmer, 2018. "Disruptive Innovation: An Intellectual History and Directions for Future Research," Journal of Management Studies, Wiley Blackwell, vol. 55(7), pages 1043-1078, November.
    10. Burgers, J. Henri & Jansen, Justin J.P. & Van den Bosch, Frans A.J. & Volberda, Henk W., 2009. "Structural differentiation and corporate venturing: The moderating role of formal and informal integration mechanisms," Journal of Business Venturing, Elsevier, vol. 24(3), pages 206-220, May.
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    12. O'Reilly, Charles A., III & Tushman, Michael, 2007. "Ambidexterity as a Dynamic Capability: Resolving the Innovator's Dilemma," Research Papers 1963, Stanford University, Graduate School of Business.
    13. Hadjielias, Elias & (Lola) Dada, Olufunmilola & Discua Cruz, Allan & Zekas, Stavros & Christofi, Michael & Sakka, Georgia, 2021. "How do digital innovation teams function? Understanding the team cognition-process nexus within the context of digital transformation," Journal of Business Research, Elsevier, vol. 122(C), pages 373-386.
    14. Kathleen M. Eisenhardt & Nathan R. Furr & Christopher B. Bingham, 2010. "CROSSROADS---Microfoundations of Performance: Balancing Efficiency and Flexibility in Dynamic Environments," Organization Science, INFORMS, vol. 21(6), pages 1263-1273, December.
    15. J. Daniel Sherman & Robert T. Keller, 2011. "Suboptimal Assessment of Interunit Task Interdependence: Modes of Integration and Information Processing for Coordination Performance," Organization Science, INFORMS, vol. 22(1), pages 245-261, February.
    16. Sebastian Raisch & Julian Birkinshaw & Gilbert Probst & Michael L. Tushman, 2009. "Organizational Ambidexterity: Balancing Exploitation and Exploration for Sustained Performance," Organization Science, INFORMS, vol. 20(4), pages 685-695, August.
    17. Barrett, Gillian & Dooley, Lawrence & Bogue, Joe, 2021. "Open innovation within high-tech SMEs: A study of the entrepreneurial founder's influence on open innovation practices," Technovation, Elsevier, vol. 103(C).
    18. Lori Rosenkopf & Patia McGrath, 2011. "Advancing the Conceptualization and Operationalization of Novelty in Organizational Research," Organization Science, INFORMS, vol. 22(5), pages 1297-1311, October.
    19. Lysander Weiss & Dominik Kanbach, 2022. "Toward an integrated framework of corporate venturing for organizational ambidexterity as a dynamic capability," Management Review Quarterly, Springer, vol. 72(4), pages 1129-1170, December.
    20. Magali Geerts & Michaël Dooms & Lara Stas, 2021. "Determinants of Sustainability Reporting in the Present Institutional Context: The Case of Port Managing Bodies," Sustainability, MDPI, vol. 13(6), pages 1-23, March.
    21. Yang Yang & Ju Xiao Feng, 2018. "Entrepreneurial Orientation and Firm Performance: Is Product Quality a Missing Link?," Entrepreneurship Research Journal, De Gruyter, vol. 8(1), pages 1-13, January.
    22. Xing, Yijun & Liu, Yipeng, 2023. "Integrating product-service innovation into green supply chain management from a life cycle perspective: A systematic review and future research directions," Technovation, Elsevier, vol. 126(C).
    23. Sebastian Raisch & Michael L. Tushman, 2016. "Growing New Corporate Businesses: From Initiation to Graduation," Organization Science, INFORMS, vol. 27(5), pages 1237-1257, October.
    24. Nowacki, Caroline & Monk, Ashby, 2020. "Ambidexterity in government: The influence of different types of legitimacy on innovation," Research Policy, Elsevier, vol. 49(1).

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