Organization Design and Firm Heterogeneity: Towards an Integrated Research Agenda for Strategy

33 Pages Posted: 24 May 2018

See all articles by Florian Englmaier

Florian Englmaier

Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Nicolai J. Foss

Copenhagen Business School - Department of Strategy and Innovation

Thorbjorn Knudsen

University of Southern Denmark - Department of Marketing & Management - Strategic Organization Design Unit (SOD)

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Centre for Economic Policy Research (CEPR)

Date Written: May 15, 2018

Abstract

We argue that organization design needs to play a more active role in the explanation of differential performance and outline a set of ideas for achieving this both in theoretical and empirical research. Firms are heterogeneous in terms of 1) how well they do things, capturing persistent productivity differences, and 2) how they do things — and both reflect firms’ organization design choices. Both types of heterogeneity can be persistent, and are interdependent, although they have typically been studied separately. We propose a simple formal framework — the “aggregation function framework” — that aligns organization design thinking with the emphasis on performance heterogeneity among firms that is characteristic of the strategy field. Our framework allows for a more precise identification of how exactly organization design may contribute to persistent performance differences, and therefore what exactly are the assumptions that strategy and organization design scholars need to be attentive to.

Suggested Citation

Englmaier, Florian and Foss, Nicolai J. and Knudsen, Thorbjorn and Kretschmer, Tobias, Organization Design and Firm Heterogeneity: Towards an Integrated Research Agenda for Strategy (May 15, 2018). Available at SSRN: https://ssrn.com/abstract=3179196 or http://dx.doi.org/10.2139/ssrn.3179196

Florian Englmaier

Department of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Nicolai J. Foss (Contact Author)

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilen
Frederiksberg, 2000
Denmark

Thorbjorn Knudsen

University of Southern Denmark - Department of Marketing & Management - Strategic Organization Design Unit (SOD) ( email )

Faculty of Social Sciences
Campusvej 55
DK-5230 Odense
Denmark

HOME PAGE: http://www.sdu.dk/sod

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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