- Open Access
Design, Perception and Behavior in the Innovation Era: Revisiting the Concept of Interdependence
© The Author(s) 2017
- Received: 14 February 2017
- Accepted: 22 September 2017
- Published: 5 October 2017
The innovation era has seen firms adopting a variety of organization designs with autonomous teams as their basic building blocks. Such organization designs have confronted firms with the challenge of managing complex task interdependence configurations. The predominant assumption within the organization design field for decades has been that task interdependence given by design would determine team behavior. We argue on theoretical grounds that research on interdependence should revisit the relationship between design and behavior. More specifically, we suggest social interdependence theory as a valuable complementary theoretical lens for examining the subtleties of how design shapes behavior and how behavior in turn may influence design. At the end of our discussion, we propose the implications for research and practice and present several research opportunities which are expected to further contribute to a better understanding of the strategic organization of innovation-led firms.
Organizational evolution in different historical eras (adapted from Miles et al. 1997)
Key design variables
Hierarchy, centralized authority
Teams, autonomous cells
Dominant organization design
Divisional design, matrix
No dominant design
Chief operating officer
Chief information officer
Chief knowledge officer
Specialization and segmentation
Flexibility and responsiveness
Design and creativity
Much has been written about the cataclysmic changes in organizations’ environments which have confronted firms with conundrums, forcing managers to re-examine and rethink the science and art of organization design (Lewin and Stephens 1993). The significance of technological advancement and threat of creative destruction have caused firms to experiment with a multitude of increasingly complex organization designs due to the absence of “up-to-date” reference theories (Galbraith 2012; Gulati et al. 2012; Huber, 2016; Obel and Snow 2012). Examples of organization designs adopted by firms in the innovation era are the virtual organization (Markus et al. 2000), the spin-out organization (Ambos and Birkinshaw 2010), the cellular organization (Miles et al. 1997), the spaghetti organization (Foss 2003), the modular organization (Galunic and Eisenhardt 2001), and the ambidextrous organization (Tushman and O’Reilly 1996). An important common characteristic of these novel organization designs is that they harbor task-interdependent teams which operate as self-organizing units and experience considerably autonomy (Baer et al. 2010; Miles et al. 2010; Pandza et al. 2011). Considering the importance of autonomous teams as building blocks of novel organization designs and the strategic requirement for productive interactions between them, we argue for a renewed interest, and close examination of issues of interdependence between teams. The discussion in this paper therefore focuses on the between-team level of analysis.
In traditional studies on task interdependence, a workforce is assumed which performs tasks in complete accordance with the organization design (Cheng 1983; Burns and Stalker 1961; Lawrence and Lorsch 1967; Thompson 1967). Task interdependence is defined as the extent to which the organization’s tasks require its members to work with one another because of interdependent workflows (Thompson 1967). A subtle but important point made in other studies is that the task interdependence that is designed and the interdependence that is actually perceived or experienced by teams are not necessarily equal (Kumar et al. 1995; Nickerson and Zenger 2002; Ramamoorthy and Flood 2004; Sherman and Keller 2011). The actual or social experience of interdependence between teams is referred to as “social interdependence” (Johnson et al. 2006). The central problem we present in this paper is that given any sophisticated organization design for managing innovation (De Visser et al. 2010), teams could deviate from the designed task interdependence because they have a different perception and experience of interdependence. This could cause unexpected or even unwanted effects on task execution and performance. We propose that studies of interdependence in the innovation era should combine task and social interdependence theory (Deutsch 1949; Johnson and Johnson 2005) as it could contribute to a better understanding of how structure and behavior interact in organization designs with an increasingly important role for team collective agency (Pandza 2011) as a driving force behind self-organization.
This paper revolves around two important ideas: (a) the idea of potential asymmetries between designed (task) interdependence and perceived (social) interdependence and (b) the possibility of teams behaving in ways differently from the designed task interdependence in cases where designed and perceived interdependence are not equal. The first idea relates to the cognitive and emotional experience of interdependence and its (mis)alignment with organization design, while the second relates to the behavior resulting from interdependence and its (mis)alignment with organization design.
Task (designed) and social (perceived) interdependence are not necessarily equal.
In cases where they are not equal, the resulting behavior may be different from what is expected by design with potentially significant and negative consequences for performance.
Prior studies on mismatches between different forms of interdependence have focused on designed versus required interdependence (Tushman and Nadler 1978), task versus agent interdependence (Puranam et al. 2012), and external demands versus organization design (Ethiraj and Levinthal 2004). These studies revolve around cognitive issues of information processing requirements versus information processing capacity and have led to significant contributions in the organization design field. Our paper complements these advancements by elucidating additional sources and consequences of asymmetries rooted in social perceptions and behavior. This implies that while there may be a match between the information processing requirements and capacity in a certain configuration, the perception of for example fierce rivalry between teams, i.e., one team believes its success depends on the failure of the other team, could still lead to interdependence asymmetries with adverse effects on important firm-level outcomes such as creativity and performance (Baer et al. 2010). We therefore propose a more vigorous inclusion of social interdependence theory in studies on organization design to account for the social and emotional complexity of organizational behavior that goes beyond information processing requirements versus capacity. Unfortunately, the potential of social interdependence theory has not been sufficiently capitalized on as it has mainly been studied in classroom settings and to a lesser extent in organizations (Wageman 1995). Those studies that use the theory in organizational settings (e.g., Gong et al. 2013; Hirst et al. 2009) do not include an organization design perspective and therefore do not reveal how task interdependence may affect social interdependence and vice versa. Such an approach is required to reveal the complex interplay between structure and behavior and ultimately, to lead to a better understanding of organizational decisions, actions, and outcomes (Gavetti et al. 2007).
These ideas provide some opportunities for further research. Future studies could examine additional antecedents that produce asymmetries between task and social interdependence. We have for example suggested the potential role of rewards and compensation. If teams are rewarded for team-level performance and not for inter-team collaboration, then there is an obvious incentive for local optimization, particularly if collaboration with other teams would delay or complicate performance. An intelligent design of compensation, in accordance with the desired behavior by design, is therefore crucially important for managers and organization designers. Extant research (Wageman 1995) has indeed shown the importance of aligning task and reward interdependence; a next interesting step would be to explore how reward interdependence could correct potential mismatches between task and social interdependence.
Researchers could also explore if there are any feedback loops when task and social interdependence are misaligned. If a different (from design) perception of a given task interdependence configuration exists, what would happen subsequently? Does this perception of interdependence matter at all for a given design or does the given design persist over time despite this perception? There is some promising evidence (Laloux, 2014; Langfred, 2007) revealing local, autonomous attempts to correct asymmetries. This is a particularly intriguing avenue for future studies as some very recent research has shown the potential role of feedback loops in correcting flawed initial designs (Lee and Puranam, 2015; Puranam and Swamy, 2016). These designs do not have to mean imminent collapse if managers are willing to utilize feedback as a trigger for organizational learning. Interestingly, Puranam and Swamy (2016) argue that flawed designs may even be superior than having no initial design at all if managers, designers and teams are willing and able to use powerful learning as a platform to get closer to optimal configurations of interdependence; in our opinion, characterized by a better match between task and social interdependence. Lee and Puranam (2015) corroborate this view by separating between beliefs (here: task interdependence) and action (here: social interdependence). The authors suggest that flawed strategies should be assumed, what is much more important is a precise implementation leading to the discovery of superior assessments. Additional research should reveal the micro-level processes by which teams respond when their social interdependence is different from the task interdependence, potentially helping the organization to arrive at superior designs.
Finally, we also very much encourage studies on the development of particular typologies characterizing different types of asymmetries between task and social interdependence which could help identify, predict, and prevent situations of unproductive interactions between teams (Snow and Ketchen 2014).
Do you believe your goals could be achieved more effectively if you collaborate with the other team(s)? If no, please elaborate.
Do you believe your goals would be more difficult to achieve if you have to collaborate with the other team(s)? If yes, please elaborate.
Do you interpret the interdependence between you and the other team(s) as positive or negative? Please elaborate.
Do you believe cooperating with the other team(s) would lead you to earn greater rewards than if you would not cooperate with them? If no, please elaborate.
If subsequently these questions reveal a social interdependence which differs from the task interdependence, then managers could ask the involved teams to collaboratively propose a set of recommendations that would bridge the gap between design and perception. This could enhance the extent to which teams experience ownership of the new design and potentially improve the effectiveness of the interactions that would follow.
Another important implication for practice is that although we have previously argued that a significant mismatch between task and social interdependence is more likely to lead to negative than positive consequences, this does not mean that there is absolutely nothing firms can do to cope with such asymmetries once they have arisen. Managers can in fact use mechanisms based on design or based on principles of self-organization (Laloux 2014) to bridge any gaps. Regarding design, Nadler et al. (1997) propose that it is important for managers to think of ways to integrate the activities of teams in complex organization designs. They refer to this as “structural linking” which is crucial to ensuring teams keep contributing to corporate goals instead of them diverging into unrelated or even conflicting directions (Taylor 2010; Zhou 2013). A prevalent structural linking mechanism included in the organizational design of large organizations is the cross-functional interface (Jansen et al. 2009). Cross-functional interfaces generate horizontal connections between units. Examples are cross-functional teams, task forces, and liaison positions (Gupta and Govindarajan 2000). The term ‘functional’, however, refers to the functional organization design which was dominant in the standardization era. The innovation era, with its diversity in organization design, is less about functions but more about highly specialized autonomous teams. Cross-functional teams therefore should be instructed to integrate activities across different teams instead of higher-level functions. If the cross-functional interface comes across any obstacles to integration related to asymmetries between task and social interdependence then trained specialists from HR could be mobilized to act as “design doctors” and remedy issues of interdependence by for example redefining roles, work procedures, or adjusting compensation structures (e.g. introduce variable compensation between teams which need to collaborate instead of compete). The appropriate “remedy” may vary depending on the nature and significance of the mismatch.
Another mechanism that could help in solving issues with interdependence asymmetries is the democratization of design authority, i.e., implementing an organization design based on principles of self-organization (Schreyögg and Sydow 2010). Although academics have reported a myriad of organization designs in the current “innovation era,” an overarching trend is that these developments have introduced teams as the core unit in the organizational system. Research has shown that these autonomous teams are able to independently reorganize tasks and activities within teams (Langfred 2007), so why would they not be able to do this between teams?
CEO Tony Hsieh’s introduction of the “holacracy” design at Zappos is a popular case study of the democratization of organization design (Laloux 2014). The extremely flexible circle structure of this particular design allows teams and employees to create and shape interdependence based on perceived matches between task and competence. Design authority is completely distributed while behavior and performance are guided by vision and culture instead of hierarchy and structure. Researchers have previously argued for maintaining hierarchy as an important predictor of the success of “loosely coupled systems” (Ethiraj and Levinthal 2004) such as the holacracy to prevent a never ending search for a design that works for everyone. The Zappos’ case study actually demonstrates that even in the absence of hierarchy (there are no managers in the holacracy design), firms can “evolve toward and stabilize on appropriate forms” (p. 430). We understand it may be too big a leap for established organizations to implement this abruptly but we encourage firms to at least experiment with these principles at specific peripheries, e.g., corporate venturing units or innovation management teams.
To conclude then, we encourage empirical studies integrating task and social interdependence to reveal how organization design shapes the behavior of autonomous teams in innovation-led organizations and how the consequent behavior in turn may influence organization design. This would help increase understanding of the composite relationship between structure and behavior and potentially expand the range of potential drivers of interdependence from environmental and hierarchical factors to collective agency on the level of teams. A better understanding of the interplay between social/emotional factors and technical/design factors within and between teams is also important for the development of best practice and strategies for managers in the innovation era; an era in which tasks are complex, teams are multidisciplinary, and acceleration to market is imperative. New insights into interdependencies could improve product or service outcomes and lower the risks of project failure.
This paper benefited from the Marie Curie FP7 ITN grant to the first author (Grant No.: 238382).
AES contributed to the academic elaboration of organization design and interdependence in the paper. TW contributed to assessing the practical relevance of the main idea of the paper and to reviewing the main conceptual argument for clarity and consistency. Both authors read and approved the final manuscript.
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