Knowledge that Transforms

This paper examines some determinants of the choice between focused and distributed modes of organization in research and development (R&D). It argues that as organizations face mounting information-processing challenges, posed by complexity and uncertainty and inherent in innovation, they gravitate towards either a focused or distributed organizational form. The paper argues further that the institutional context within which organizations operate exerts an important influence on their choice between these forms. These themes are explored through a statistical analysis of programs to develop novel manufacturing processes in the global semiconductor industry. The results show that while Japanese organizations adhered to a distributed form of organization, US firms moved towards a more focused mode.

Using entropy statistics we analyse scaling patterns in terms of changes in the ratios among product characteristics of 143 designs in civil aircraft. Two allegedly dominant designs, the piston propeller DC3 and the turbofan Boeing 707, are shown to have triggered a scaling trajectory at the level of the respective firms. Along these trajectories different variables have been scaled at different moments in time: this points to the versatility of a dominant design which allows a firm to react to a variety of user needs. Scaling at the level of the industry took off only after subsequently reengineered models were introduced, like the piston propeller Douglas DC4 and the turbofan Boeing 767. The two scaling trajectories in civil aircraft corresponding to the piston propeller and the turbofan paradigm can be compared with a single, less pronounced scaling trajectory in helicopter technology for which we have data during the period 1940–1996. Management and policy implications can be specified in terms of the phases of codification at the firm and the industry level.

In this paper, we assess complexity in organizations in terms of the dimensions of ‘depth’ and ‘breadth’. We examine how this operates in firms, indicating how different fields of research have tended to highlight only certain aspects of complexity, for instance, technology or products. In addition to assessing the impact of growing complexity in each functional area along either dimension, we further investigate the conditions under which complexity between the dimensions or functional areas may be coactive or conflicting. Detailed examination of historical evidence shows that greater complexity in one dimension or function does not necessarily lead to greater complexity in another. However, any simplification within a function or between functions may require changes in organizational structure and managerial control.

Concern about the poor performance of the construction industry, in the UK and elsewhere, is coming at a time when its customers are demanding more and projects are becoming increasingly complex. Many of the industry's performance problems stem from inadequate inter-organisational co-operation. The paper explores the problems and solutions in aligning the construction industry more closely to its customers in CoPS-type projects. Using the example of a high value, high complexity offshore oilfield construction project, the paper examines the use of ‘partnering’ as a tool for stimulating performance gains at the project level and innovation and learning benefits at the organisational level.

In recent years, there has been a trend towards a science and technology policy that is applied in nature. In times of growing public discontent about high taxation and budget deficits, even basic science needs to document industry relevance. Counting patents apparently related to basic research activities through citations would be one way of measuring the relevance of basic research to industry. This has become especially interesting since Narin et al. [Narin, F., Hamilton, K.S., Olivastro, D., 1995. Linkage between agency supported research and patented industrial technology. Research Evaluation 5 (3), 183–187.] observed an increasing linkage between US technology and public science. The results of Narin et al. indicate a growing relationship between science and technology in a very general way. This idea of an increasingly science-based technology might convey the impression that there is direct knowledge-transfer taking place that is reflected in citations to scientific research papers in patents. A study of front pages of patents in the field of nanoscale technologies suggests that citation linkages hardly represent a direct link between cited paper and citing patent.

This paper provides a framework linking products to innovation processes in order to show how knowledge, technology and organisation are all interrelated. These interactions create specific innovation management problems for companies developing complex, systemic capital goods. Firms can reduce development schedules and costs by efficiently allocating resources to reduce uncertainty about the implications of different design options. The paper proposes that technologies are constructed by following a set of interrelated problem solving tasks that constrain the range of possible innovation processes. The dynamic interactions between these interrelated tasks and the organisation of specialised labour influences the success of problem solving (as does problem-solving technology) and consequently the number and extent of redesign feedback loops in the innovation process. These redesign feedback loops have implications for the schedule, cost and quality of the project. The more general framework is illustrated by a case study of product development in the aeroengine sector.