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in business and as such might be useful in having a common understanding of what we’re talking about, much of it is outdated: organization design has shifted it’s focus over time.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’.
This infographic is part of the book
Why this typology: innovation management in organizations
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).
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)
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
– Berends, H., Jelinek, M., Reymen, I., & Stultiëns, R. (2014). Product innovation processes in small firms: Combining entrepreneurial effectuation and managerial causation. Journal of Product Innovation Management, 31(3), 616–635. doi:10.1111/jpim.12117
– Berends, H., Smits, A., Reymen, I., & Podoynitsyna, K. (2016). Learning while (re)configuring: Business model innovation processes in established firms. Strategic Organization, 14(3), 181–219. doi:10.1177/1476127016632758
– Birkinshaw, J., & Gibson, C. (2004). Building ambidexterity into an organization. MIT Sloan Management Review, (4), 47–55.
– Busenitz, L. W. (1996). Research on entrepreneurial alertness: Sampling, measurement, and theoretical issues. Journal of Small Business Management, 34(4), 35.
– Cameron, K. S., & Quinn, R. E. (2011). Diagnosing and changing organizational culture: Based on the
competing values framework. John Wiley & Sons.
– Chesbrough, H. W. (2007). Why companies should have open business models. MIT Sloan Management Review, 48(2), 22–28.
– Coley, S. (2009). Enduring ideas: The three horizons of growth. McKinsey Quarterly.
– Crossan, M. M., & Apaydin, M. (2010). A multi‐dimensional framework of organizational innovation: A systematic review of the literature. Journal of Management Studies, 47(6), 1154–1191. doi:10.1111/j.1467-6486.2009.00880.x
– DaSilva, C. M., & Trkman, P. (2014). Business model: What it is and what it is not. Long Range Planning, 47(6), 379–389. doi:10.1016/j.lrp.2013.08.004
De Jong, J. P. J., & Marsili, O. (2010). Schumpeter versus Kirzner: An empirical investigation of opportunity types. EIM Business and Policy Research, Scales Research Reports.
– Garud, R., & Van De Ven, A. H. (1992). An empirical evaluation of the internal corporate venturing process. Strategic Management Journal, 13(S1), 93–109. doi:10.1002/smj.4250131008
Georghiou, L., & Sachwald, F. (2017). Europe’s future: Open innovation, open science, open to the world: Reflections of the Research, Innovation and Science Policy Experts (RISE) High Level Group. Retrieved from the EU Publications website: https://publications.europa.eu/en/publication-detail/-/publication/527ea7ce-36fc-11e7-a08e-01aa75ed71a1
– Griggs, D., Stafford-Smith, M., Gaffney, O., Rockström, J., Öhman, M. C., Shyamsundar, P., … Noble, I. (2013). Policy: Sustainable development goals for people and planet. Nature, 495(7441), 305–307. doi:10.1038/495305a
– Keeley, L., Walters, H., Pikkel, R., & Quinn, B. (2013). Ten types of innovation: The discipline of building breakthroughs. Hoboken, NJ: John Wiley & Sons.
– Kirzner, I. M. (1999). Creativity and/or alertness: A reconsideration of the Schumpeterian entrepreneur. Review of Austrian Economics, 11, 5–17. doi:10.1023/A:1007719905868
– Lawrence, K. (2013). Developing leaders in a VUCA environment. UNC Executive Development, 1–15. Retrieved from https://www.emergingrnleader.com/wp-content/uploads/2013/02/developing-leaders-in-a-vuca-environment.pdf
– Manshanden, W., de Heide, M., Koops, O., van der Horst, T., Poliakov, E., Bulasvkaya, T., … Bekkers, F. (2014). De Staat van Nederland Innovatieland: R&D: impuls voor economische groei. Special issue [The State of the Netherlands as an Innovation Country: R&D: Impetus for economic growth]. The Hague Centre for Strategic Studies.
– Meadows, D. H. (2008). Thinking in systems: A primer. London: Chelsea Green Publishing.
– Nagji, B., & Tuff, G. (2012). Managing Your innovation portfolio. Harvard Business Review, 66. Retrieved from https://hbr.org/2012/05/managing-your-innovation-portfolio
– O’Reilly, C. A., III, & Tushman, M. L. (2008). Ambidexterity as a dynamic capability: Resolving the innovator’s dilemma. Research in Organizational Behavior, 28, 185–206. doi:10.1016/j.riob.2008.06.002
– O’Reilly, C. A., III, & Tushman, M. L. (2013). Organizational ambidexterity: Past, present, and future. Academy of Management Perspectives, 27(4), 324–338. doi:10.2139/ssrn.2285704
– Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. Hoboken, NJ: John Wiley & Sons.
– Osterwalder, A., Pigneur, Y., Bernarda, G., & Smith, A. (2014). Value proposition design: How to create products and services customers want. Hoboken, NJ: John Wiley & Sons.
– Raworth, K. (2017). Doughnut economics: Seven ways to think like a 21st-century economist. London: Chelsea Green Publishing.
– Reymen, I. M. M. J., Andries, P., Berends, H., Mauer, R., Stephan, U., & Burg, E. (2015). Understanding dynamics of strategic decision making in venture creation: A process study of effectuation and causation. Strategic Entrepreneurship Journal, 9(4), 351–379. doi:10.1002/sej.1201
– Romme, G. (2016). The quest for professionalism: The case of management and entrepreneurship. Oxford, UK: Oxford University Press.
– Sachs, J. D. (2012). From millennium development goals to sustainable development goals. The Lancet, 379(9832), 2206–2211. doi:10.1016/S0140-6736(12)60685-0
– Samuelsson, M., & Davidsson, P. (2009). Does venture opportunity variation matter? Investigating systematic process differences between innovative and imitative new ventures. Small Business Economics, 33(2), 229–255. doi:10.1007/s11187-007-9093-7
– Schumpeter, J. A. (1934). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle (Vol. 55). Piscataway, NJ: Transaction Publishers.
– Shane, S. A. (2003). A general theory of entrepreneurship: The individual-opportunity nexus. Cheltenham, UK: Edward Elgar Publishing.
– Simon, H. A. (1991). Bounded rationality and organizational learning. Organization Science, 2(1), 125–134. doi:10.1287/orsc.2.1.125
– Tushman, M., Lakhani, K., & Lifshitz-Assaf, H. (2012). Open innovation and organization design. Journal of Organization Design, 1(1), 24–27. doi:10.7146/jod.6336
– United Nations. (2017, May 17). Innovators, UN discuss using tech to tackle world’s development challenges. Retrieved from https://news.un.org/en/story/2017/05/557562-innovators-un-discuss-using-tech-tackle-worlds-development-challenges
– Van De Vrande, V. (2017). Collaborative innovation: Creating opportunities in a changing world. ERIM Inaugural Address Series Research in Management. Retrieved from http://hdl.handle.net/1765/100028
– Walrave, B., van Oorschot, K. E., & Romme, A. G. L. (2011). Getting trapped in the suppression of exploration: A simulation model. Journal of Management Studies, 48(8), 1727–1751. doi:10.1111/j.1467-6486.2011.01019.x
– Zwaan, B. van der. (2016). Haalt de universiteit 2040? Een Europees perspectief op wereldwijde kansen en bedreigingen [Will the university reach 2040? A European perspective on worldwide opportunities and threats]. Amsterdam, the Netherlands: Amsterdam University Press.