The impact of personnel turnover on an organization's ability to learn, and hence on its ultimate performance, is explored for organizations with different structures and different tasks. A model of organizational decision making is presented where: (1) the organization is faced with a continuous sequence of similar but not identical problems; (2) each problem is so complex that no one person has access to all of the information nor the skill to comprehend all of the information necessary to make the decision; (3) individual decision makers base their decisions on their own previous experience; and (4) there is personnel turnover. Using simulation the impact of turnover on the rate and level of learning for hierarchies and teams is examined. This research suggests that while teams in general learn faster and better than hierarchies, hierarchies are less affected by high turnover rates particularly when the task is nondecomposable. Institutionalized memory, as embodied in the memories of distributed individuals and in the advisory relationships between individuals, determines the consequences of personnel turnover.
The conventional view of transaction processing, which has focused primarily on highly structured transactions, oversimplifies the information processing environment confronting most organizations. This exploratory field study investigates how U.S. Senate offices answer constituent mail on legislative issues. The study develops a model which views transaction processing systems (TPS) as an organizational information system. Using this model, the paper next develops the position that when TPS are viewed this way, the design and functioning of all TPS may be analyzed using the answers to three questions: (1) what transactions will be accepted by the organization for processing, (2) what rules will be used for processing transactions, and (3) how will feedback about these transactions be routed upward? Unlike most structured transactions, mail transactions are designed by the correspondent rather than the organization. As a result, the task of answering mail is characterized by low analyzability and high variety not found in most other routine transaction processing applications. Implications for the design of systems to support the processing of unstructured transactions in other contexts are discussed.
This paper examines the effectiveness of organizational problem solving in response to technological change in the production process. First, the paper measures the degree of uncertainty associated with a given technological change by examining (1) the novelty of specific new features and functions, and (2) the required departure from established operating assumptions and organizational relationships. Second, the paper identifies three modes of problem solving that organizations use in dealing with technological change: modification prior to implementation (preparatory search), joint work with external technical experts during production start-up (joint search), and integration of engineering and manufacturing functions engaged in start-up (functional overlap). The effectiveness of these approaches is then tested on a sample of 48 new process introductions undertaken in eight plants by a leading global producer of precision metal components. Results indicate that the measured characteristics of technological change are significant predictors of the difficulties encountered in introducing new process technology. Findings also suggest that intensive problem solving efforts can significantly improve change outcomes, both shortening the period of disruption experienced and increasing the operating gains achieved. In addition, there was some evidence that the three organizational problem solving activities discussed here are not equally effective for responding to all types of process change. Specifically, the higher the level of technical novelty involved, the less useful was overlap between engineering and manufacturing functions. This challenges the general prescription that cross-functional team involvement in major technical projects always should be maximized, regardless of the nature of the change involved.
This paper reports on research designed to test a dynamic model of the causes of organizational innovation. Two communication variables (level of information and group communication) and three motivational variables (perceptions of equity, expectations of benefits, and perceived social pressure) were derived from equity theory, expectancy theory and the theory of reasoned action. These variables were used to predict the number of innovative ideas contributed by members of the organizations. Weekly data were collected for over a year from five firms and were analyzed with multivariate time series techniques. The results indicated that the communication variables were causes of organizational innovation but the motivational variables were not. Across the five firms, the variance explained by the model ranged from a low of 30 percent to a high of 78 percent. In four of the five firms, the forecast accuracy for the amount of individual innovation ranged from a low of 77 percent to a high of 85 percent.
A critical challenge facing organizations is the dilemma of maintaining the capabilities of both efficiency and flexibility. Recent evolutionary perspectives have suggested that patterns of organizational stability and change can be characterized as punctuated equilibria (Tushman and Romanelli 1985). This paper argues that a learning model of organizational change can account for a pattern of punctuated equilibria and uses a learning framework to model the tension between organizational stability and change. A simulation methodology is used to create a population of organizations whose activities are governed by a process of experiential learning. A set of propositions is examined that predict how patterns of organizational change are affected by environmental conditions, levels of ambiguity, organizational size, search rules, and organizational performance. Implications of this learning model of convergence and reorientation for theory and research are discussed.
The increasing reliance on teams in organizations raises the question of how these teams should be formed. Should they be formed completely of engineers or should they include a range of specialists? Should they be made up to people who have long tenure in the organization, or those with a wide range of experience? As teams increasingly get called upon to do more complex tasks and to cross functional boundaries within the organization, conventional wisdom has suggested that teams be composed of more diverse members. This study suggests that the answer may not be so simple. Using 409 individuals from 45 new product teams in five high-technology companies, this study investigates the impact of diversity on team performance. We found that functional and tenure diversity each has its own distinct effects. The greater the functional diversity, the more team members communicated outside the team's boundaries. This communication was with a variety of groups such as marketing, manufacturing, and top management. The more the external communication, the higher the managerial ratings of innovation. Tenure diversity had its impact on internal group dynamics rather than external communications. Tenure diversity is associated with improved task work such as clarifying group goals and setting priorities. In turn, this clarity is associated with high team ratings of overall performance. Yet diversity is not solely positive. While it does produce internal processes and external communications that facilitate performance, it also directly impedes performance. That is, overall the effect of diversity on performance is negative, even though some aspects of group work are enhanced. It may be that for these teams diversity brings more creativity to problem solving and product development, but it impedes implementation because there is less capability for teamwork than there is for homogeneous teams. These research findings suggest that simply changing the structure of teams (i.e. combining representatives of diverse function and tenure) will not improve performance. The team must find a way to garner the positive process effects of diversity and to reduce the negative direct effects. At the team level, greater negotiation and conflict resolution skills may be necessary. At the organization level, the team may need to be protected from external political pressures and rewarded for team, rather than functional, outcomes.
During the last three decades, sophisticated techniques for analysis of market investment have been developed by financial economists. At the same time, however, concepts and methods for analysis of resource allocation within firms have lagged behind market theory. The analysis of investment within firms has been based primarily on applications of economic theory that exhibit serious weaknesses. The special problems associated with analysis of investment in firms have become an important concern of strategic management. Recent “resource-based” approaches to strategy have developed valuable insights into the limitations of economic analysis of the firm. Although the resource-based work has not yet provided formal methods comparable to the Capital Asset Pricing Model, it has made important progress in building foundations for an alternative analysis of economic organization. This paper explores weaknesses in the financial economic analysis of the firm and examines alternative perspectives in the work on resource-based strategy. The paper focuses on problems associated with use of market models such as the CAPM for capital allocation within firms. Working from basic premises of transaction-cost economics, the paper identifies important flaws in financial-economic techniques for defining hurdle rates for capital projects. The paper discusses underlying logical problems associated with the application of market theory to complex organizations and examines ways that alternative approaches to resource allocation have begun to evolve within the field of strategic management.
We propose that service encounters (the interaction between customers and employees) can be conceptualized, and managed, as rites of integration. Rites of integration are defined as planned social interactions that have the objective of achieving “a temporary sense of closeness” between customers and service providers. We argue that such rites help to establish the appropriate level of psychological involvement or the appropriate degree of psychological closeness between the service provider and the customer. Psychological involvement facilitates (a) the sharing of information by customers and employees that is necessary for service production and (b) the favorable evaluation, by customers, of the service delivery process. We describe (and give examples of) different types of rites that result in varying levels of involvement. We conclude by offering propositions for the consequences associated with customers having their expectations of involvement confirmed or disconfirmed. These consequences include the importance of a “zone of indifference” around individual expectations of levels of involvement and the negative effects of too much closeness between the employee and customer.
The present study explores the central tenet of media richness theory, derived from contingency theory: when (1) information processing capabilities match (2) information processing demands, (3) performance will improve. This article tests whether using communication media that differ (1) in media richness or social presence (2) in conditions of differing task analyzability (3) affects self-reported performance components such as quality of work, effectiveness, productivity, ability to obtain information, decision-making ability, access to others, etc. The article first reviews the theoretical constructs of media richness and social presence, task characteristics, and performance, with particular reference to organizational computer-mediated communication media. It also identifies important but untested assumptions that media richness theory has, to date, made about the forms of the relationships among these variables. The theory assumes that use-performance relationships are nonmonotonic, that is, that the relationship between use and outcomes is positive when a medium's richness “fits” task requirements, and negative when it does not. The theory also assumes that use-performance relationships are symmetric, that is, that the relationship between use and outcomes in different task conditions is similar but opposite for “rich media” and “lean media.” Hypotheses test the direction and form of relationships involving use of online databases in several pooled organizations, electronic mail in one organization, voice mail in two organizations, and videoconferencing in one organization, in task conditions varying in analyzability. Results are mixed, depending on analytical method and dataset used, but show modest support for the contingent effect of task condition on the relationship between use of these new media and performance components. Results are stronger for information-lean media than for information-rich media. The results are generally monotonic and asymmetric, thus qualifying prior media richness assumptions. Implications for theory and research include slight support but conceptual qualification of media richness theory, and an improved understanding of new organizational media. Implications for management and practice include a need to appreciate appropriate uses of and opportunities for different communication media in organizational contexts. This paper is written with the assistance of: Paul J. Hart, Ph.D., Computer and Information Systems Department, Florida Atlantic University, Boca Raton, Florida; Jack Torobin, Ph.D., Delphi Communication Services, Los Angeles, California; Douglas Shook, Ph.D., Communication Sciences, Los Angeles, California; Joyce E. Tyler, M.A., Arthur Andersen, Inc., Alexandria, Virginia; Lynne Svenning, Ph.D., Telecommunications Research Group, Wilmington, Delaware; John Ruchinskas, Ph.D., Telecommunications Research Group, Los Angeles, California, and Arden, Delaware.