Typology for Organizations: an update

It has been a while since Henry Mintzberg developed his influential work that made us aware of the importance of structures in organization design. To my opinion, Mintzberg’s work was a refreshing change to the world of organization design that until then has been largely influenced by Taylor’s Scientific Management Approach and Henry Ford’s efficiency-based adaptation of that.

As an entrepreneur and lecturer in organization science I find myself still using Mintzberg-related terminology on a regular base: ‘professional organizations’, ‘top management’, ‘middle management’, ‘hierarchy’ or ‘organization charts’. While these terms may be common language in business and as such might be useful in having a common understanding of what we’re talking about, much of it is outdated: organization design has shifted it’s focus over time. Structures are no longer of primary focus in design organizations. In fact, building blocks as ‘middle management’ might only still exist on paper today. Let me show you how the focus of organization design has changed over the years:
 

Scholar Organization Design in their eyes
Frederick Winslow Taylor (1911) Organization Design encompasses the development of task packages for employees that align with their strengths and competencies. It enhances productivity.
Henry Ford (1913) Ford embraced the idea that not tasks should be optimized, but processes should be optimized and automatized: organization design is the effective and efficient design of processes.
Henry Mintzberg (1979) Mintzberg looked at organization design from a perspective of structures.
Robert Quinn & Kim Cameron (1983) Quinn & Cameron argued that organization can be defined by their cultures and introduced their Competencies Values Framework.
Larry Greiner (1989) Greiner discussed in his work Evolution and Revolution as Organizations Grow that all of the before are true, but change over time for a growing company.
Steve Blank (1995) Steve Blank argued, while coining the term Customer Development, that organization design needs to support the value proposition of organizations.

 

But times are changing and organizations are emerging, scaling and managed completely differently. New generations, societal change, sustainable goals and disruptive technology require organizations to be much more flexible, self-reinventing organisms that don’t fit above-mentioned design principles. They require openness, transparency, adaptability, co-creation, self-management and responsiveness. While searching for a modern-day typology for innovative organizations – to show our students and what kind of context they most likely would want to work – I found that none was there, so I created a new one.

A Typology for Innovative Organizations

Below you’ll find an overview of the new typologies that I’d like to propose. The model describes organizational typologies based on cultures of innovation. This model is drawn upon a combination of Quinn & Cameron’s values framework (2011) and Nagji and Tuff’s innovation ambition framework (2012). The typology proposes 4 types of organizations. Each type of organization exists in three different levels of innovation. At the centre are the innovation brokers: consultancy firms, education professionals and knowledge brokers who do not directly work with innovation, but accelerate it (Chesbrough, 2007).

On the right-hand side you’ll see a more structured-approach to the new typologies. All of Mintzberg’s types would now be grouped under ‘traditional structures’.

Typology for Innovative Organizations.
Figure 1: Typology for Innovative Organizations. The figure in the middle was initially published in 2018 in the internal document Professional Profile Business Innovation at Avans University of Applied Sciences which I co-authored with the aim of explaining students in what environment they are most likely to find jobs after graduating.

Why this typology: innovation management in organizations

Academic Relevance

Innovation Management focuses on creating and managing sustainable business (Crossan & Apaydin, 2010; Keeley, Walters, Pikkel, & Quinn, 2013).
 
Romme (2016) argued that we are now far beyong early thinkers as Taylor and Ford and that organizational learning is a key aspect for innovative organizations (drawn from i.e. Garud & Van De Ven, 1992; Romme, 2016; Romme & Endenburg, 2006, Simon, 1991) and for business model innovation (Berends, Smits, Reymen, & Podoynitsyna, 2016; DaSilva & Trkman, 2014). Organizational learning helps innovative organizations to deal with the ever-changing, unsure and unpredictable context of business (Van De Vrande, 2017).
 
As a result, ‘typologies’ are not as black-and-white as they used to be. Organizations are now ambidextrous by nature: ‘the ability of an organization to both explore and exploit—to compete in mature technologies and markets where efficiency, control, and incremental improvement are prized and to also compete in new technologies and markets where flexibility, autonomy, and experimentation are needed’ (O’Reilly & Tushman, 2013, p. 2) and has been widely studied (i.e. structured ambidexterity; O’Reilly & Tushman, 2008; i.e. contextual ambidexterity; Birkinshaw & Gibson, 2004). As such, a modern-day typology for innovative organizations should deal with ambiguity in organizations.
 
Ambiguity isn’t new: the ‘Schumpetarian approach’ and the ‘Kirznerian approach’ have widely discussed over the last decades. The Schumpetarian approach argues that organizations try to create something new (De Jong & Marsili, 2010; Schumpeter, 1934), while Kirzner argues that it’s about seizing existing opportunities (Kirzner, 1999). Research has shown that organizations deal with different strategies over time and that organizational design takes a more flexible approach in order to simultaneously deal with both effectuation and causation (Samuelsson & Davidsson, 2009; Johnson, Craig, & Hildebrand, 2006; Shane, 2003; Busenitz, 1996; Walrave, van Oorschot, and Romme, 2011; De Jong & Marsili, 2010; Reymen et al., 2015, Christensen, 2011, Birkinshaw & Gibson, 2004, Kelley, 2005).

Socio-economic Relevance

An updated version of typologies is useful because it adopts new discussions, for instance about overexploitation (Raworth, 2017), innovation (Coley, 2009) and sustainability (Griggs et al, 2013; Sachs, 2012, United Nations, 2017) and puts them at the heart of organizational typology. As such, education programs and public instances would be more accurate in their teaching – which has a strong influence on future economic developments (Georghiou & Sachwald, 2017, p. 29). It follows up on trends in education to break the shift towards a more entrepreneurial environment into a model of multisided value creation (Manshanden et al, 2014; Zwaan, 2016)

Usage

The model can be used in three different ways:

  • For identification: it helps you in identifying the (most applicable) form of organizational typology for your organization. It helps in explaining differences between organizations and it helps in understanding why some companies mature in innovation and other don’t. It helps students in preparing for business environment and finding types of organizations that suit their wishes. It creates a common language.
  • For analysis: it helps in analyzing the strenghts and weaknesses of every aspect of your organizations. You can create a weighted variant that reveals the nuance in your strategy and company branding.
  • For discussion: it helps in understanding and discussing the strenghts and weaknesses of regional ecosystems, as it may be used to show the importance of certain types of organizations that are under- or over-represented in your area. It helps in organization your partner-network and starting open innovation projects

References

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