Professional Documents
Culture Documents
Hybrid Firm
• Breaking into sub-
units.
• Advantages of the
small and big firms.
Structural Dimensions
Affects a Firms propensity to Innovate
Standardisation Formalisation
• Uniformity • Degree of use of rules,
• Advantages: procedures and written
Predictable Quarterly documentation.
Earnings • Advantages: Smooth
• Disadvantages: Can Running of Large MNC
limit innovation. • Disadvantages: Rigid
firm, Limits Creativity
Structural Dimensions
Affects a Firms propensity to Innovate
Centralisation Decentralisation
R&D
Division
Division
R&D R&D
Division Division
Division Division
HQ .
HQ
R&D
Division Division
Division Division
R&D R&D
Structural Dimensions
Affects a Firms Propensity to Innovate
Centralisation Decentralisation
• Maximisation of • Enables development
economies of scale. of new products.
• More Coordinated • Disadvantages: Risk,
• Top Management have redundancy.
Control
Mechanistic vs Organic Structures
Efficiency or Flexibility...
Mechanistic Organic
• Blend of Formalisation • Free Flowing Structure
and Standardisation • Entrepreneurial
• Suited to Large Volume Environment
Low Margin Setting • Little Standardisation
• Not Suitable for or Formalisation
Innovation
Efficiency or Flexibility
Striking the balance...
Efficiency Flexibility
Efficiency or Flexibility
Striking the balance...
Economies of Scale i l it y
Control Fl exib
e nc y
E ffici
Efficiency or Flexibility
Striking the balance...
Effic
iency Innovation
Creativity
Flexi
bility
Efficiency or Flexibility
Striking the balance...
• Modular Manufacturing
o Flexible Manufacturing Systems (Sony)
o Standardised Components (PCs)
• Loosely Coupled Organisations
o Embedded Coordination (Open Standards)
o IT Enabling Advanced Coordination (B-2 Bomber)
! Transparency
! Lower Searching Costs
! Monitoring