The effects of history on organization design

Raveendran, Marlo (2013) The effects of history on organization design. Doctoral thesis, University of London: London Business School.

Abstract

In this dissertation, I address the central question: how does the established structure of an organization affect both the process of choosing a new design, as well as the content of that new design? I shift the focus away from the traditional view on organization design decisions as working off a blank canvas, and consider how established social relationships and established structures affect the choices regarding the new designs. In chapter 2, I explore the organizational re-design decision theoretically. Building on the epistemic interdependence perspective, which I developed jointly with Thorbjørn Knudsen and Phanish Puranam, I propose that history affects the designer's process of task allocation, as well as his choice of new designs, and the implementation speed of new structures. In chapter 3, I examine the extent to which the process of division of labor is affected by the technological properties of the task in conjunction with individuals' perception of the task decomposability and history in the behavioral laboratory. I find that task division is significantly affected by the individuals' perception of the task, and task allocation is altered in the presence of history. The technological property of the task has an important impact on both, the task division as well as the task allocation. In chapter 4, I examine the impact of prior structures on reorganization decisions at the macro-level, with data on the global cell phone manufacturing industry. I use the corporate-level reorganizations across the entire industry over 25 years to examine the impact of the established structural emphasis on subsequent re-design choices. I find that firms show a systematic tendency of reversal between different structural foci. In addition, the rate of reversals is significantly and asymmetrically affected by the organization's current structural emphasis, which speaks to the question of the effect of history on the implementation speed of new structures.