Abstract

http://ssrn.com/abstract=1032007
 
 

References (65)



 
 

Citations (13)



 


 



Renewal Through Reorganization: The Value of Inconsistencies between Formal and Informal Organization


Ranjay Gulati


Harvard Business School - Organizational Behavior

Phanish Puranam


INSEAD


Organization Science, Forthcoming

Abstract:     
We develop a theoretical perspective on how inconsistencies between formal and informal organization arising from reorganization can help create ambidextrous organizations. We argue that under some conditions, the informal organization can compensate for the formal organization by motivating a distinct but valuable form of employee behavior that the formal organization does not emphasize, and vice versa an effect we label compensatory fit. We illustrate the concept of compensatory fit by drawing upon qualitative data from a re-organization at Cisco Systems. We also derive formal boundary conditions for compensatory fit using a simple game theoretic representation. We show that compensatory fit can only work when there is a powerful informal organization already in existence, and when the gains from ambidexterity are substantial. Further, depending on the strength of the informal organization, breakdown in the conditions necessary for compensatory fit may lead to performance declines and further re-organizations.

Number of Pages in PDF File: 53

Keywords: Organization structure, formal and informal organization, inter-unit coordination

JEL Classification: L22, D23

Accepted Paper Series


Download This Paper

Date posted: November 28, 2007  

Suggested Citation

Gulati, Ranjay and Puranam, Phanish, Renewal Through Reorganization: The Value of Inconsistencies between Formal and Informal Organization. Organization Science, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1032007

Contact Information

Ranjay Gulati
Harvard Business School - Organizational Behavior ( email )
Soldiers Field Road
Morgan 317
Boston, MA 02163
United States
617-495-8554 (Phone)
617-496-6568 (Fax)
HOME PAGE: http://www.hbs.edu
Phanish Puranam (Contact Author)
INSEAD ( email )
1 Ayer Rajah Avenue
Singapore, 138676
Singapore
HOME PAGE: http://www.insead.edu/facultyresearch/faculty/profiles/ppuranam/

Feedback to SSRN


Paper statistics
Abstract Views: 2,488
Downloads: 679
Download Rank: 19,080
References:  65
Citations:  13

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.297 seconds