Impact of Organisational Structures and Processes on Innovation - 2750 Words

Impact of Organisational Structures and Processes on Innovation (Research Paper Sample) Content: University Impact of Organisational Structures and Processes on Innovation By Student’s Name Date of Submission Instructor Impact of Organisational Structures and Processes on Innovation Introduction The environment of today’s business organisations is competitive and turbulent. The changes that take place in the environment that influence the operations of a business mainly relate to variation in products or services, markets, and technology. The rapid advancement in technology continues to change how services and products are produced and delivered to customers. It is essential to note that the leaders and employees in an organisation play an important role towards the success of innovation. Since the organisational structure of a company and its processes determine the relationship among its members, they can influence innovation to a great extent. The interplay of power and relationship styles between the organisational members can either impede or promote innovation. This paper examines the how organisational structure and processes can support or impede an organisation’s ability to innovate. Type of Organisational Structure The type of organisational structure present in an organisation can affect its ability to innovate to a great extent. This is because the type of structure of an organisation determines how the knowledge present is going to be managed. While most organisations in the past were guided by scientific principles of management, the firms in today’s environment have focused more on change. This is mainly due to the challenges present due to turbulence and uncertainty. Therefore, unlike in the past where organisational structures were rigid, most of today’s organisations have chosen to adopt a more flexible structure. The type of organisational structure that is adopted by a firm determines its ability to promote innovation. There are many different organisational structures among which a firm’s operations can be categorised into. In this context, however, organisations are viewed as either pro-scientific management or built-to-change. According to Lawler and Worley (2006), as globalisation increases, greater flexibility and innovation is recommended for organisations. As such, companies are being encouraged to move away from rigid structures to ones that can adapt to changes quickly. In this regard, organisational structures that are flexible to changes in the environment are ones that are likely to promote innovation. Pro-scientific management organisations, on the other hand, tend to hinder innovation since they do not promote change. Lawler and Worley (2006) inform that the way a firm manages talent determines its ability to promote innovation. While recruitment in pro-scientific management organisations focuses on hiring people for specific purposes, built-to-change firms recruit individuals who are ready to adapt to changing roles. When it comes to reward, employees in pro-scientific management firms are remunerated for work done while for built-to-change organisations; they are compensated and developed for future purposes. It is thus evident that built-to-change organisations have more focus on the employee compared to the pro-scientific management firms. The reward system for built-to-change organisations focuses on motivating the employee to embrace change and encourage performance. In regards to information sharing, there is transparency in built-to-change organisations. Pro-scientific management firms, on the other hand, tend to restrict information to managers only. As such, pro-scientific management organisational structures do not have in place performance-based information systems unlike in built-to-change organisations. Therefore, since information sharing is limited, innovation is also negatively affected. According to Lawler and Worley (2006), spreading of power and knowledge among members of the organi sation enables quick response to information. It is evident that pro-scientific management organisational structures do not support knowledge sharing among organisational members and thus impedes innovation. Therefore, the type of organisational structure that a company adopts can either support or impede its ability to be innovative. Since built-to-change firms have flexible organisational structures, they are better placed when it comes to promoting innovation. Basically, pro-scientific management organisations can be referred to as bureaucratic while built-to-change ones can be said to be adhocratic. The features of a bureaucratic organisational structure that are likely to hinder innovation include many formal procedures and rules, centralised decision making, and direct control by management. On the other hand, adhocratic organisational structures’ features that promote innovation include working in teams, few rules and procedures, decentralised decision-making, self-ma nagement. It is evident that the employee is allowed more autonomy in the adhocratic organisation structure that creates an atmosphere of innovation. Organisational Boundaries The boundaries within an organisation can either encourage or impede innovation. Ernst and Chrobot-Mason (2011) identified six boundaries that can influence the ability of an organisation to innovate. It is essential for a manager to be aware of these boundaries and how to handle them. According to the authors, vertical boundaries are ceilings and floors that separate the members of an organisation according to privilege and rank. This boundary defines the hierarchical order within the organisation. According to Ernst and Chrobot-Mason (2011), strategy flows up the hierarchy while production flows upwards. Therefore, innovation is limited since there is little interaction between the subordinates and the management. Horizontal boundaries also pose a challenge for innovation in organisations. These boundaries are found across the units and functions of an organisation (Ernst and Chrobot-Mason, 2011).These are the walls that divide employees according to their area of expertise and experience. These boundaries can be a problematic to the organisation when one unit is favoured over another. This can affect the operations of an organisation since it can create conflicts among different units. With no collaboration, innovation is likely to be affected negatively. Stakeholder boundary is also a major challenge for managers. The stakeholders have interests in the activities of the organisation, and if not managed well, innovation is likely to be hindered. Possible stakeholders for a firm include vendors, the board of directors, employees, customers, the government, advocacy groups, among others. According to Ernst and Chrobot-Mason (2011), stakeholder boundaries can create divides when an organisation decides to focus on their individual interest at the expense of those of stakeholders. For example, neglecting the interest of sponsors can reduce funding which can, in turn, affect the resources available for innovation. Demographic boundaries also are a challenge for innovation. According to Ernst and Chrobot-Mason (2011), demographic boundaries occur when employees are classified according to gender, ideology, race, or education. With the increase in diversity of employees in today’s organisations, demographic boundaries can affect the production levels of employees. As such, there is a need for better management of the diverse members that make up today’s workforce in order to suppress such boundaries. This way, the members of the organisation will be able to work together and in the end develop new ideas. Finally, geographic boundaries also are part of the challenges that face managers. There are many organisations today that have operations in different countries of the world. The conditions in the nations are different in terms of laws, technology, competition, among other factors. Managers, therefore, find it difficult to determine the processes to integrate across all the geographically dispersed units and what to implement in the local environments (Ernst and Chrobot-Mason, 2011). It is thus essential for the geographical boundaries to be dismantled to enable greater efficiency. The above boundaries can be an impediment to innovation in an organisation. For that reason, they have to be managed properly for the benefit of all organisational members. Buffering, according to Ernst and Chrobot-Mason (2011) is one of the way an organisation can reduce the effect of these boundaries. Buffering involves the shielding of the members of a particular unit from threats or outside influences. This helps in creating and maintaining a clear identity and such enables the group to be strong. The role of the leader, in this case, is to help the units work through and around the boundaries in order to engage in productive activities with o ther groups. Reflecting is also a strategy that can help in managing challenges brought about by boundaries. Reflecting helps the members of a group see the priorities, roles, and values of their counterparts. This helps the members of a group identify the common goals between them and other groups. Connecting is also a practice that is useful in managing the boundaries and allows members from various units to interact with one another thus creating cross-boundary relationships. Mobilising is also another strategy that can be applied to manage the boundaries and aims to create a new identity that is recognised and shared by all members rather that a particular unit. Other practices, according to Ernst and Chrobot-Mason (2011) are weaving and transforming. Since these practices help in the management of boundaries, they can play a significant role in fostering innovation in an organisation. Organisational Culture The culture present in organisation determines its ability to promot e innovation. As such innovation in an organisation is driven by its norms, beliefs, rules...