Relationship Between Organizational Structure and Innovation

Relationship between organizational structure and Innovation

Abstract: The way we have summed it up

This report discusses the dynamic relationship between organizational structural forms and innovation. It starts with technical definitions of various related terms such as innovations, organizational structure etc. It provides a critical review of literature focussing on whether structure of an organization contributes towards innovation or not. Then it moves systematically towards formation of hypothesis and their testing in the light of the findings of literature review and theoretical results that are already well established and accepted as standards. Although innovation is generally viewed as technical innovation, this study is extended to organizational innovation too, i.e. new ways in which work can be organized, and accomplished within an organization to encourage and promote competitive advantage. The report also validates the findings through the example of a real organization that has shown continuous innovation in the past. The limitations of the study that were experienced in the form of real time series data availability etc are discussed. The paper supports organization structure as one of the most important attributes that helps bringing in innovation into the organization. The report integrates general organizational theories that apply to organizational structure and innovation with research finding and comes to a conclusion whether there is relationship between structure and innovation.

Introduction: Back to basics

Is there any relationship between organizational structure characteristics and innovation? Well, this is not a question with a straight yes or no answer.

An organization’s propensity to innovate is not function of just one variable, it depends on various attributes and the degrees of contribution of these attributes vary from organization to organization. Primary attributes that contribute towards innovation in an organization...