deck_17717128-2 Flashcards
What is Organizational Design?
Definition, drivers and complementary problems
Defintion
Organizational Design is an everday activity and challenge for executives
30 % of variation in performance can be explained by the organizational design
Drivers
- Increased competition
- Deregulation
- Shortened product life-cycle
- Projectification
- Shortended product launch windows
- Emerging markets
- Political risks
- New technology
OD incorporates two complementary problems
1. Partition a big task of the whole organization into smaller tasks of the subunit
2. Coordinate smaller tasks to fit and efficiently realize bigger taks or goal
Key Issues with managing change
4 Key Premises
- Strategy matters - in identifying the need for change and the direction of change
- Context matters - the right approach to change depends on the circumstances
- Inertia and resistance - getting people to change from existing ways of doing things is essential
- Leadership matters - good leadership of change at all levels is needed
Strategy
Definition & Purpose
Definition
A stratgy reflects management’s assessment of the firm and its choice of how to purse the firm’s goals.
Mission Statement - provides clarity about what the organization is fundamentally there to do
Vision Statement - is concerned with the future the organization seeks to create
Statements of Corporate Values - Communicate core principles that guide an organization’s strategy and the way it should operate
Objectives: Are statements of specific outcomes that want to be achieved
Types of Strategic Change
2 axis (Nature of change | Extent of change)
Adapation (Incremental | Realignment)
- can be accomondated with existing culture and can occur incrementally
- Most common form of change
Reconstruction (Big Bang | Realignment)
- Rapid change but without fundamentally changing the culture
- Involves upheaval
- Turnaround strategy to deal with diverse problems:
- Crisis stabilisation
- Management changes
- Gaining stakeholder support
- Clarifying the target markets and core products
- Financial restructuring
Evolution (Incremental | Transformation)
- Culutural change is required
- Difficult (when no need for change)
Revoultion (Big Band | Transformation)
- Fundamental changes in both strategy and culture
- Cases where strategy is bounded by culture
Diagnosing the Change Context
Factors of a strategic change program:
- Time
- Scope
- Preservation
- Diversity
- Capability
- Capacity
- Readiness
- Power
Strategic Leadership
Definition, Roles & Middle Management
Leadership is the process of influencing an organization in its efforts towards achieving a goal.
Three key roles
- Envisioning future strategy
- Aligning the organization to deliver that strategy
- Embodying change
Middle managers also have a key role in leading change
- “Sense Making” of strategy - local leadership role
- Reinterpretation and adjustment of strategic responses as events unfold
- Advisor to more senior management on problems
Newcomers and Outsiders
Outsiders play an important role in strategic change
- New chief executive - New perspective
- New management - Increase diversity of ideas
- Consultants - help to formulate stratety and change process
Why change programs fail
7 failings
- Death by planning
- Loss of focus
- Reinterpretation of change in terms of current culture
- Disconnectedness
- Behavioural compliance
- Misreading scrutiny and resistance
- Broken agreements and violation of trust by management
Information-Processing View
Definition & Strategy
An organization uses information to coordinate and control its activities in the face of uncertainty
Information processing is a way to view an organization and its design
Organizational design matches demand for information processing in its information-processing capacity
2 design strategies (Mangerial Options):
- Reduce need for inforamtion processing
- Increase capacity to process information
The Multi-Contingency Model
Based on 9 components
Uses the information-processing view as basis for assessing the fit and misfit relation between the organization’s components
Framework to design an organization
Step-by-step of the book is the process of designing the organization
Organizational Goals
Component 1
Efficiency
Primary focus on making optimal use of inputs & resources to minimize costs
Effectiveness
Focus on achieving high outputs, financial results or products and services
Quadrant A (Low | Low)
- Little focus on using resources well
- No specific goal related to higher-level goals
- Monopoly or early start-up
Quadrant B (High | Low)
- Utilazation of smallest amount of resources necessary to produce
- Continue to improve processes
- Low-cost focus works well in stable environment
Quadrant C (Low | High)
- Focus on product and service goals
- Constantly developing new ideas > Innovator
- First-mover advantage with high prices
Quadrant D (High | High)
- Confront competitive, complex and volatile environments
- Most difficult to achieve
Strategy
Component 2
Exploitation
Taking advantage of current technologies to do things in a new manner. Includes refinement, efficiency, selection and implementation
Exploration
A way of seeking new technologies or way to do things. Includes search, variation, risk-taking an innovation
Reactor (Low | Low)
- Makes adjustments when forced > lost opportunety
- Decisions made on bad news
- Leads to poor performance long term
Defender (High | Low)
- Focus on keeping the market position
- The past is projected as the future
- Very competitive pricing
- To remain competitive continous refinement of process is required
- Slow in change > Vulnerable when products are not demanded anymore
Prospector (Low | High)
- Focus on innovation of new things
- Searching for new market opportunities
- Must be agile to succeed
- Quality is not the primary concern
- Development cycle must be short
- Is vulnerable when fails to innovate
Analyzer without Innovation (HIgh | High/Medium)
- Main focus still on efficency
- Similar to defender, but has passive innovation strategy
- Imitates successful products
- Is vulnerable when following wrong trend
Analyzer with Innovation (High/Medium | High)
- Dual strategy > combining defender and prospector
- Active innovation strategy
- Tries to innovate to meet market needs
- Difficult to ballance, requires great skill and expertise
- Defend position while also exploring frontiers
- Dual goals often conflict
Environment
Component 3
General
- Everything outside scope
- Increase in each demension increases the need for information-processing capacities.
Complexity
Number of major factors and their interdependency affecting the organization
Unpredictability
Lack of undertanding of the environment in terms of variance and its impact on the organization
Calm (Low | Low)
- Simple with few surprises
- Not very frequent due to dregulation of markets
- No need to spend much time to assess environment
- Management needs to be catious about correct categorization and change
Varied (High | Low)
- Market forcasts and analysis are applied to predict future environment with decent accuracy
- Company sells a high amount of products
- Cooperation with governmental institutions
Locally Stormy (Low | High)
- Few factor bu highly unpredictable
- Internal flexibility must meet the outside uncertainty
- Can be dealt on local basis
Turbulent (High | High)
- Most difficult to manage
- Requires large and fast information-processing capacity to quickly choose among alternative courses (Analytic with live data, AI)
Configuration
Component 4
General
- Determines the information and product flow of an organization
- Illustrates how tasks are partitioneed into smaller tasks
Complexity
- Horizontal (width) differnetiation > degree of task specialization across hierarchy
- Vertical (height) depth of the hierarchy
Functional Specialization
Determines to what extend a task is divided by functionally specialized activities
Product/Service/Customer orientation
How much the total firm task will be partitioned by the outputs of the firm
Simple (Low | Low)
- Consists of executive with a few other individuals
- No defined job description, as-needed basis
- Constrained by managers ability to process information
- Used by small firms, departments
Functional (High | Low)
- Broken down into sub-unit with department managers and well-definied jobs
- Machine-like and rule-based
- Production flow is from one sub-unit to the next (requires coordination)
- Most common configuration
- strong reliance on skills of executive to manage short-term coordination and long-term choice of specialization
- High efficiency
- Poor communication across sub-units
- Number of sub-units is determined by
- Limited time of executives
- Capacity of sub-units to process information
- Trend towards delayering -> elimination of middle-management levels -> possible with advanced IT
- Change is difficult
- Strengths
- Firm’s design maintained
- Fosters dvelopment of in-depth knowledge
- Standard career paths
- Project team members remain connected with their functional group
- Weaknesses:
- Functional siloing
- Lack of customer focus
- Projects may take longer
- Projects may be sub-optimized
Divisional (Low | High)
- Executive level oversees sub-units
- Sub-Units are independent
- Division is its own business with own markets and customers
- Top executive sets policy for division
- Some divisional organizations have shared service center that provide services for other divisions
- Difficult to coordinate and handle interdivisonal dependencies well
- Divisions can be easily sold off
- Goal to have divisions with minial interdependency
- Information exchange focus
- Short term: cashflows and financial goals
- Long-term: capital budgets and technology planning
Matrix (High | High)
- Top executive is responsible for function and divisional dimensions
- Functional is crossed with product orientation
- Very flexible, dealing with new information and adjusting to new situations
- Can handle lots of information
- If well aligned > organization is efficiency and effectiveness
- If not > neither > information overload, dicision delay
- Benefits exceed additional coordination costs
- Jello effect > Change in timing ripples across the whole firm
- Strengeths
- Suited to dynamic environments
- Equal emphasis on project managmeent and functional efficiency
- Promotes coordination across functional units
- Maximizes scare resource
- Weaknesses
- Dual hierarchies mean two bosses
- Negotiation required in order to share resources
- Workers caught between competing projects & functional demands
Configurations for Spanning Geography
Global
International
Multi-Domestic
Transnational
Task Design
Component 5
General
- How should an organization be designed to perform its work?
- Task design is decomposing work into sub-tasks while considering the coordination among the sub-tasks to meet organizational goals
Task categories
- Transformation
- Transactions
- Judgments
- Social
- Creative
Connectedness
When a bigger task is broken down into sub-tasks which require little coordination it has low connectedness
Variability
If a task is well defined such that it is undertaken again and again, then it has low variability
Orderly (Low | Low)
- Tasks get assigned by top executive
- Tasks are independet from each other
- Tasks are standardized
- No coordination required between units
- Design fits robots
- Few social or creative tasks
Complicated (High | Low)
- Tasks require high coordination due to high connectedness > requires high information processing
- Tasks are still independent from other tasks
- Tasks are repetitive and standardized
- Auto assembly
- All Task categories
Framgmented (Low | High)
- Require less coordination
- Work can be indipendently processed at pace of each sub-unit
- Agile > easy to adjust to changeing technology or customer preference without coordination with other sub-unit
- All Task categories
Knotty (High | High)
- Is favoured for new product development
- Information processing need varies strongly from task to task
- All task categories balanced, but social tasks most common
Leadership Style
Component 6, Levels
Theories
- Theory X manager is short-term and control-oriented
- Theory Y leader delegates, is long term and motivates through inspiration
Levels of Leadership
- Positional - rights
- Permission - relationships, listen, observe and learn
- Production - results, good examples, momentum
- People Development - recruitement, positioning, equip
- Pinnacle - respect
Uncertainty avoidance
Is the degree to which the top management shuns taking actions or making decisions that invovle major risk
Preference for delegation
Is the degree to which the top management encourges lower-level managers or other employees who report directly to them to make decisions about what and how work is to be done in the organization
Maestro (Low | Low)
- Will intervene directly to ensure that deccisions are made congurent with own desires
- Acting reactive to change
- Can become overly involved and overly burdened with too much to do
- A effective meastro requires great expertise
- Fits with a small start-up company; Problematic for larger company
- Appropriate in a crisis or when major change accours
- AI will help as a decision-making tool
Manager (High | Low)
- Reactive to change
- Making short-term decisions with fine levle of detail
- Focuses on control of operation
- Does not delegate decision-making authority
- Uses formalized rules to manage subordinates
- Knows what is happening in detail and reacts quickly to undesired activities
- Makes organization vulnerable if issues are overlooked or receive little attention
- Little attention to innovation except in process
Leader (Low | High)
- Leader is confident that others can make good decisions for the firm
- Uses delegation to save time
- Embraces long-term uncertainty as challengy by attending to more strategic decisions
- Long-term thinking, taking risks and avoiding detailed control
- Explores new ideas and actions, encouraging new ideas, initiatives and projects
- Vulnerable to weak follow-up behavior in the process of implementation
- Lack of attention to detail can create large problems for the organization
Producer (High | High)
- focuses on short and long term goals, operations and strategy, current products and innovation
- Wants to know what’s going on but does not make every decision
- Uses long-term forecasting and planning to avoid uncertainty
- Delegates to others but with an oversight to ensure decisions being made fit their preferences
Decision-making
Definition, Models
Definition
A moment, in an on-going process of evaluating alternatives for meeting an objective at which expectations about a particiular course of action impel the decision-maker to select that course of action most likely to result in attaining the objective
A commitment to action
The Rational Model
- Identify and define the problem
- Generate alternative solutions to the problem
- Select solution and implement it
Normative models
- Define the problem
- Identify the criteria
- Weight the criteria
- Generate alternatives
- Rate each alternative on each criterion
- Compute the optimal decision
Assumption for Decision-makers
- Perfectly define the problem
- Identify all criteria
- Accurately weigh all of the criteria according to their preferences
- Know all relevant alternatives
- Accurately assess each alternative based on criterion
- Accurately calculate and choose the alternative with the highest perceived value
Bounded rationality
The idea that when individuals make a decision their rationality is limited as a consequence of the information that they hold, cognitive limitations in their minds and the time available to them
People in an organization
Role, Question, Matrix
Definition
- “An enterprise is its people”
- People represent the intellectual capacity of the firm
- Question for executives: How many people of various skills do I need and what is the best way to coordinate them given the organization’s goals
- As the number of people increases, communication becomes more involved
- Each person’s attention is limited and costly
Axis
- Number of people
- Professionalization
Categories
- Shop (Low | Low)
- Factory (High | Low)
- Laboratory (Low | High)
- Office (High | High)
Organizational Climate
Component 7
Definition
Organizational climate is the relatively enduring quality of the internal environment of an organization that is
- expected by its members
- influences their behavior
- can be described in terms of values of a particular set of characteristics
Tension
Is the degree to which tere is a sense of stress in the work atmosphere. Tension incorporates a combination of organizational factors as experienced by insers, including trust, conflict, morale, rewards, leader credibility, and scapegoating
Readiness to change
Is the degree to which the people in the organization are likely to change direction or adjust heir work habits to meet new, unanticipated challenges.
Group (Low | Low)
- Calmness, comfort and relaxation
- Open and free flow of information
- Pleasent place to work where individuals trsut each other and conflict is low
- Reward are perceived as equitable
- Little readiness to change
- Getting people to embrace a challenge is difficult
Internal Process (High | Low)
- High conflict, low morale and low leadership credibility
- Disappointment, transquility, shame and fatigue
- Employees do not believe in successful change
- Little openness to share information
- Rewards perceived as inequitable
- Focus on work porcesses without letting high tension obstruct organizational success
- Organization structure must supply the requisite information-processing capacity
- Top-down
Developmental (Low | High)
- New events are pleasant
- Optimistic perceptions and judgment and bottom-up style, low conflict
- Rewards are perceived as equitable
- Individual contribution to the organization is more imporant
- Compromise is important
Rational Goal (High | High)
- Anger, distressed, gloomy, anxious
- Employees belive they have the adquate resources to deal with change
- Competitive and rewards are not perceived as equitable, leaders are not trustworthy
- Information sharing does not occur spontaneously
- Bottom-up information-processing style and goal-driven
- Tension boosts performance of employees
- High turn-over of employees
Coordination and Control Systems
Component 8
General
Control systems measure performance of sub-units and their people, providing feedback to managers about compliance of these units. As organizations have become flatter and more distributed, there has been increasing emphasis on coordination and lateral flow of information > coordination systems support flexibility and adaptiveness
Formalization
Is the degree to which the organization specifies a set of rules or codes to govern how work is done
Decentralization
Is the degree to which decision-making authority and responsibility for coordination and control lies in the sub-units of the firm and individual managers, rahter than corporate headquarters or one specific level fo the hierarchy
Centralizaiton
Is the degree to which coordination and control are managed by a core person or level of the organization
Family (Low | Low)
- Few written rules and proedures and people know what to do based on what htey are told by a centralized source
- Opereates like a family > head of household decides what and how work is to be done
- Works well if people comply with directives of central source
- Allows flexibility
- Troubles arise if new members are added
- Entrepreneurs often run start-up ventures using a family model
- Leader needs to be competent
Machine (High | Low)
- Authority rests in a central, core place, such as corporate headquarters, the CEO, or some other center of power in the organization
- Machine model systems are designed with documentation of rules and procedures in mind
- It is defined on how work should be done, how it is to be monitored and how the feedback and correction systetems should be designed
- Tend toward bureaucracy with many rules and procedures to govern work process
Market (Low | High)
- Emphasis is non more informal sources of control (people are encouraged to “speak up” and report problems)
- Informal approach to setting expectations and detecting difficulties occur through training, customs and everday interactions of people
- Variations in coordination and control across departments and sub-units
- Sub-units oversee and police themselves
- Tendencies towards conflict due to different polcies
Clan (High | High/Medium)
- It uses strong norms to guide how work is done and these norms are embedded in the minds of employees
- Rules for coordiantion and control are communicated via extensive modeling by both workers and managers and in discussion of “the way we do things” during the everyday life
- Strong attention is given to designing systems that communicate these norms
- Written rules and procedures establish a minimal set of necerssary standards
- Success depands on having leaders who communicate a strong set of norms and values that underlie how work is to be accomplished, and on selecting and training employees who are versed in those norms
- Employees are loyal to the organization
Mosaic Model (High/Medium | High)
- Greater tendency for heterogeneity of systems than in the clan model
- Does not attempt to have all of its coordination and control systems standardized througout the firm
- Standards are customized to needs of sub-unit
- Customized systems should still be compatible as possible with standard systems
Information and Knowledge Systems
Knowledge is information that corresponds to a particular context.
Amount of Information
The overall volume of data that an organization must collect, process and store on a regular basis
Tacit Nature of Information
Characterized by casual ambiguity and difficulty of codification
Event-Driven (Low | Low)
- System is designed to process information associated with specific occasionsn or result as they occur
- Meetings, announcements, email, call on as-needed basis
- Require little planning to implement
- Rely on person-to-person contact
- Can be effective way to generate and transfer information to meet the specific knowledge needs of a given project, event or client
Data-Driven (High | Low)
- Require ongoing capture, analysis and transfer of vital information
- Processes data in systematic and intelligent way
- Has to be condifiable
- Transaction-based system
Agent-Driven (Low | High)
- Priority of system is to bring people together so they can share tacit knowledgte or use computer systems that readily support rich knowledge transfer
- Works with small amounts of data
Relationship-Driven (High | HIgh)
- It emphasizes caputre, processing ande transfer of data that is embedded in the links between people and data
- Links vertically, horizontal and externally using IT
- CRM systems capture large data plus unstructured observations
Structures for Managing Knowledge
General
Knowledge exchange is the sharing of information that requires interpretation, or intelligence, to fully understand and apply
IT infusion
Refers to the extent to which a firm relies on IT based systems including data processing and computer-based communication systems, to manage knowledge exhange
Virtualization
Refers to the degree of buoundary, spanning or organizational “reach§ that a company uses as the basis for knowledge exchange
- Ad Hoc Communications (Low | Low)
- Informated (High | Low)
- Cellular (Low | High)
- Network (High | High)
Incentives
Component 9
General
Incentives are means or instruments designed to encourage certain actions or behavior on part of employees, or groups of employees
Target of Incentive
Whether to base incentives on individual or group work performance
Basis of Evaluation
The choice of controlling behavior versus results
Personal Pay (Low | Low)
- Incetives are based on the behavior of the individual
- Emphasizes how compliant a individual is with the rules or directives (“doing work the right way”)
- Measurement of behavior is often doen by “clocking in and out”
- Actual pay is negotiated with significant differences between persons doing the same job
- Difficult of dynamic risk seekers
Skill Pay (High | Low)
- Most widley used type
- Pay differentials are skill- or position-based (formal education and seniority)
Bonus-Based (Low | High)
- Organizational results are mapped back to the accountable party who is given the bonus
- Additional to normal pay as skill-based, but can also be purly bonus based
- Goals are set for employees and rewards are distributed based on performance which is compared to the goals
- Only works if performance and outcome is clearly likable to behavior
- System is very flexible for organization
Profit-/gain-sharing
- Groups are awarded based on results
- People should have the feeling that individual perfomrance can make a difference for the group outcome
Organizational Design Configurations
Simple Configuration
- Leader dominates everything; goals are personal to the leader.
- Best in calm, stable environments with minimal internal/external change.
- Tasks and coordination revolve entirely around the leader.
- Highly flexible but risky if the leader takes the wrong action.
- Rewards, strategy, and goals are undefined and controlled by the leader.
Functional Configuration - Focus on efficiency in stable and predictable environments.
- Specialized tasks driven by standardized rules and precision (robots increasingly play a role).
- Managers emphasize indirect control (support and coaching, not punishment).
- Risks: Poor adaptability to change; opportunity losses if the environment becomes unstable.
Divisional Configuration - Focus on effectiveness for diverse and changing environments (“locally stormy”).
- Independent divisions manage their own products, services, and customers.
- Corporate HQ sets strategy, allocates resources, and selects leadership but avoids micromanagement.
- Risks: Weak coordination across divisions, lost opportunities, and possible internal competition.
Matrix Configuration - Combines efficiency and effectiveness for turbulent, fast-changing environments.
- Requires high coordination, shared leadership, and trust; employees and leaders must handle ambiguity.
- Emphasis on decentralized decision-making and shared incentives.
- Risks: High implementation demands, information overload, fragile system prone to catastrophic failure if mismanaged.
New Properties of Organizations
The Agile Organization
Definition: Rapid adaptation to market and environmental changes in a cost-effective way.
Key features:
- Decentralized decision-making within areas of expertise.
- Flexible structure: divisional, matrix, or new organizational forms.
- Leadership style focuses on readiness for change (rational or developmental climate).
Success factors:
- Quick and smooth coordination, results-based incentives, and a mindset embracing change.
Critical challenge: Aligning employee mindset with organizational goals and success criteria.
The Sustainable Organization
Definition: Focuses on the triple bottom line (social, environmental, and financial).
Key principles:
- Align survival and purpose with sustainability values at all levels.
- Integrate sustainability into all business decisions (e.g., circular economy).
Critical components:
- Dynamic integration across functions, lifecycle sustainability, and collaboration networks.
- Leadership fosters sustainability values and ensures resource efficiency and eco-effectiveness.
Example: A Danish furniture company transitioned to a circular economy, focusing on recyclable furniture and rental models.
The Digital Organization
Definition: Core business relationships and processes are digitized for efficiency and responsiveness.
Key impacts:
- AI and automation manage transformation, transaction, and management tasks.
- Digitalization enhances coordination across silos and supports decision-making.
Virtual teams:
- Operate remotely with IT as the backbone for coordination.
- Advantages: Access to global talent, scalability, and 24/7 responsiveness.
- Challenges: Communication issues, team cohesion, time zone differences, and work-life balance tensions.
Forms:
- Virtual organizations: Teams/geographies connected via IT for scalability and talent access.
- Use cases include global service, project-specific collaboration, and optimal sourcing.
Example: LEGO’s virtual top-level management allows global talent and 24/7 responsiveness.
Key success factors:
- Strong IT systems for coordination, performance evaluation, and collaboration.
- Monitoring team dynamics and addressing unique information-processing demands.
New Organizational Forms
Transition and Forms
Transformation from Traditional to New Organizations
Definition: Evolution of traditional hierarchical configurations into flexible, adaptive, or hybrid forms.
Key features:
- Variations within configurations through changes in vertical/horizontal differentiation, coordination, and information systems.
- Functional configurations maximize efficiency via specialization, balancing coordination costs.
- Rules often substitute for hierarchy, especially in self-organizing or boss-less structures.
Success factors:
- Use of digital technologies to support loose structures and reduce coordination costs.
- Aligning design with Galbraith’s information-processing theory.
Critical challenge: Balancing rules and hierarchy to avoid information overload or inefficiency.
Self-Organizing and Boss-Less Organizations
Definition: Organizations where autonomous teams create their own rules and coordinate activities without traditional hierarchy.
Key features:
- Teams operate autonomously with explicit or implicit rules (“the way we do things”).
- Coordination achieved through performance controls, IT platforms, and strong cultural alignment.
- Works best for creative, innovative tasks requiring effectiveness rather than efficiency.
Success factors:
- Recruitment of employees who thrive in autonomous settings.
- Formal mechanisms for coordination in larger organizations.
Critical challenge: Limited scalability; often suited for small organizations or sub-units in larger firms.
Example: Haier’s autonomous teams coordinated through strong performance control systems.
Hybrid Organizational Forms
Definition: Organizations combining multiple configurations to address diverse demands or transitional needs.
Key features:
- Different sub-units may adopt different configurations (e.g., functional for production, divisional for sales).
- Hybrids often emerge during transitions (e.g., LEGO’s mix of functional and divisional structures).
Success factors:
- Tailoring configurations to align with varying environmental demands.
- Coordination mechanisms to manage tension between sub-units.
Critical challenge: Potential conflict and coordination costs between different parts of the organization.
Example: Danske Bank’s “MobilePay” unit created as a separate legal entity to operate independently of the traditional organization.
Ambidextrous Organizations
Definition: Organizations that balance exploitation of current competencies with exploration of new ones.
Key forms:
- Temporal ambidexterity: Switching between exploitation and exploration over time.
- Structural ambidexterity: Separate units focus on either exploitation or exploration.
- Contextual ambidexterity: Employees divide time between exploitation and exploration in a supportive environment.
- Balanced ambidexterity: Controlled interplay of decentralized decision-making and formalized processes.
Success factors:
- Effective coordination to manage costs of switching, structural separation, or contextual demands.
- Supporting employees with processes, systems, and beliefs for balancing conflicting demands.
Critical challenge: High coordination costs and reliance on individuals capable of switching between tasks.
Example: Academic institutions where faculty explore in research and exploit in teaching activities.
