The Case for Organization Design as a Non-unitary Construct

In this chapter, it is argued that organization design should not continue to be treated as a unitary construct as was the case with organization design-as-structure. Instead, based on Barnard’s (The Functions of the Executive. Harvard University Press, Cambridge, MA, 1938) managerial theory of organization, we suggest that for different stages in the entrepreneurial/managerial process different management approaches are required, i.e., a stage focused on the efficiency of detail and a stage emphasizing the “creative economy of the whole”. Hence, in the light of two well-known management topics—management control systems and dynamic capabilities—we suggest that the construct of organization design should also be split into two levels of analysis/intervention: the local/operational/technical and the holistic. The operational level tends to be technical in nature and concerns the design and operation of organizational artefacts aimed at supporting the efficient and effective creation of value at the local level. The upper level is suggested as a holistic concern that applies non-rational, non-analytical and holistic lenses to management problems. In the case of management control systems, the whole takes the form of a logic of loose coupling, while in the case of capability theory, the holistic solution is known as dynamic capability.