Please use the homework template I attached below to complete this assignment.Detail :Read ”Dr. Gayle Brings Collaboration to CARE” at the beginning of Chapter 4 of your textbook.Read at least two scholarly articles that address organizational redesign generally, or at CARE specifically.Write a paper of approximately 750 words that answers the following questions: What role will differentiation and integration play in the organizational redesign for CARE?What teams would you recommend creating to facilitate the success of this redesign? Describe them in terms of their functions, communication and/or collaboration with other teams, and accountability to other teams.What changes in decision-making rights do you recommend to facilitate this redesign, and why? What challenges will this change pose for the organization?Describe at least one specific job redesign you recommend to facilitate the organizational redesign. What job dimensions (see Exhibit 4-5 of your textbook) are affected by this job redesign, and how does it benefit the larger change effort?What evidence of good or poor employee commitment exists currently in the organization? Describe one specific action that management can take to ensure employee commitment to the change effort. Include a minimum of two sources, which may consist of readings from the University Library, your text, or other selections.Chapter40rganizational Redesign
Diagnosis exposes the current realities of organizational life, with particular
attention to the fit between patterns of employee behavior and the strategic
requirements of the firm, to discussion and analysis. Combined with mutual
engagement, diagnosis provides both the motivation for and target of
change. Now, employees can engage in a process of organizational
redesign to help shape required new behaviors. Redesign provides a sense
of direction for the change effort.
This chapter will analyze the complexities of design choices made to
support change implementation. In particular, this chapter will:
• Define organizational design and differentiate between formal and
informal design elements
• Explore the main challenges posed by organizational redesign
• Appreciate the special design challenges faced by multinational
• Analyze the requirements for building collaboration in an organization
• Discuss the dynamics of changing the design of an organization in order
to impact patterns of behavior
First, we will look at the des!gn challenges faced by the CEO of one of the
worlds oldest and largest humanitarian organizations. As you read this
introductory case, ask yourself:
• Why was the original, decentralized design of CARE less effective in
addressing 21st century issues than it had been in CAREs earlier
• What do you think the challenge will be in promoting collaboration
across national units of CARE?
• What steps might Dr. Helene Gayle take to promote the improvements
she hopes for?
Dr. Gayle Brings Collaboration to
CARE, one of the worlds leading nongovernmental organizations, was created to provide aid to
devastated European countries in the immediate aftermath of World War II. When Dr. Helene
Gayle became CEO in 2006-after working at both the Center for Disease Control and the Bill
and Melinda Gates Foundation-the mission had changed considerably. Under the broadly
stated mandate of Defending Dignity, Fighting Poverty, CARE expanded its reach. The
organization described its new mission this way:
CARE is a leading humanitarian organization fighting global poverty. We place special focus on
working alongside poor women because, equipped with the proper resources, women have the power
to help whole families and entire communities escape poverty. Women are at the heart of CAREs
community-based efforts to improve basic education, prevent the spread of HIV, increase access to
clean water and sanitation, expand economic opportunity and protect natural resources. CARE also
delivers emergency aid to survivors of war and natural disasters, and helps people rebuild their lives. 1
Dr. Gayle believed, however, that CARE was better designed to serve its past mission than its
future opportunities.
The organization Dr. Gayle found when she became CEO was designed in a way that
maximized the autonomy of country offices: France, Germany, Italy, and so forth. The country
officers raised most of their own funds and were used to being on their own, she explained,
having a lot of autonomy, and not thinking about the greater whole.2 The managers in the
organization were comfortable with that highly decentralized design, but Gayle believed the
approach undermined CAREs effectiveness. Now, the organization had to learn how to
collaborate across national borders. To do that, she said, we had to ask, How do we make
the whole greater than the sum of its parts? The organizational change would require both
improved information sharing across country units and more rigorous measurement of results to
evaluate effectiveness.
One of CAREs first efforts at cross-country collaboration involved a project called Access
Africa. That microfinance program (making small loans to encourage entrepreneurial efforts in
poverty regions) was a 10-year investment commitment targeting 39 sub-Saharan African
countries with a combined population of 150 million. In 10 years,n Gayle noted, wed like to be
able to look back and say, Wow, this is very different than if we had continued to function as
separate country units. Still, she could not deny the challenge of implementing this change.
Organizational Redesign
In order to address the challenges of global poverty, Dr. Helene Gayle needed to encourage
collaboration among formerly independent national units of CARE. To achieve that goal, she
addressed organizational design. Organization design
refers to the arrangements, both
formal and informal, that an organization calls upon to help shape employee behavior (see
Exhibit 4-1
Building a Vocabulary of Change
Organization design
the arrangements, both formal and informal, that an organization calls
upon in order to shape employee behavior.
Exhibit 4-1 Design Elements
• Compensation
• Reporting
• Defining roles
of employees
• Defining
within the
and between
and external
Formal aspects of design include rewards and performance measurements as well as the
reporting relationships depicted on an organization chart. Informal aspects of design relate to
how people perform the required tasks of the organization and how they collaborate and work
with others, both inside the organization (within their own groups as well as across groups and
functions} and outside (with suppliers and customers, for instance}. Informal design addresses
questions of focus and coordination, of where decision-making authority will be located, and the
necessary balance between the requirement for flexibility and the need for control.
Changing Informal Design First
Effective change implementation separates the two aspects of design, targeting informal
design beforeseeking to alter formal design. 3
Theory into Practice
Effective change implementation starts with informal rather than formal design changes.
That distinction between informal and formal designs can, at times, be confusing . Job design is
informal, although job descriptions are formal. Expecting individuals to work collaboratively is
informal, although paying them based on joint outcomes is formal.
To appreciate the distinction between formal and informal design elements, we can return to
the case of ASDA from Chapter 1
. Facing bankruptcy as the result of poor strategic
decisions made by its leadership team, the chains board brought in a new CEO with the goal of
revitalization. The CEO and his top team elected to place their hopes for the revival of the chain
in the hands of the 205 store managers, those responsible for making sure that the stores met
the expectations of their customers while increasing revenues.
In the earliest stages of ASDAs transformation, store managers were asked to spend more of
their time and energies looking outside of the store-at their customers and competitorsrather than inside.Stop being supervisors and starl being strategic leaders; that was the
direction provided by the company. In order to succeed, they would have to push more and
more responsibility down to the individual department managers.
The roles and responsibilities of store managers changed dramatically. However-and here is
the point-nothing in the formal design system changed, at least not at first. Job descriptions
were not rewritten; pay systems were not changed; reporting relationships were not altered;
measurement systems remained the same. Over time , those formal structures would all be
altered, butnot in the early stages of the proce~s .
At the beginning, nobody in the company knew exactly what the store manager job would
evolve into; they only knew it would be changed. Informal redesign-new definitions of how the
store manager job would be played out-created a fluid, even experimental situation. Different
roles were tried out as transformation moved from one store to the next.
Informal design fits more effectively at the early stages of change precisely because it is
informal. No policies or procedures are altered. Nothing is written in stone or committed to
formal documents. Instead, informal design involves experimentation, trying out new roles.
What will work? What will not work? Helene Gayle did not alter the organization chart at CARE.
Reporting relationships remained unchanged. Instead, she focused on informal redesignredefining roles, responsibilities, and relationships-in order to create greater cross-border
collaboration. At a later stage, when new behaviors have been instilled, formal structures and
systems can be changed, if required, to reinforce and institutionalize those behaviors.
Piloting Redesign
Design choices represent an attempt by organizational leaders to address the challenges
inherent in managing in dynamic environments. Shifting customer expectations, disruptive
technologies, new competitors, and renewed strategies provide the impetus forredesign. If all
those elements remained the same, then the design that worked effectively in the past would
continue to prove useful in the future.
However, a truly static environment does not really exist. New competitors enter and exit the
marketplace. New technologies replace existing processes. Customer expectations shift.
Companies age; they expand and contract. Strategies change. No design solution, no matter
how useful it may be at any one time, is impervious to the need for change.
Changing an organizations design, a process known as organizational redesign
, presents
its own set of implementation challenges. Optimally, redesign occurs in a systemic and
strategic way: aligning multiple design elements with the renewed strategy of the firm. Often,
however, organizational leaders embark upon redesign in a much more haphazard, piecemeal
Building a Vocabulary of Change
Organizational redesign
the process of changing an organizations informal design in response
to shifting dynamics in the organizations environment.
Theory into Practice
The most effective way to change organizational design is to be systemic and strategic
rather than piecemeal and haphazard.
Why is it that leaders often approach redesign in such a suboptimal way? For one thing,
comprehensive redesign can be intimidating. Write Michael Goold and Andrew Campbell, Its
immensely complicated, involving an endless stream of trade-offs and variables. 4 In addition,
organizational redesign can be divisive, often pitting individuals against each other and
devolving into power plays. 5 Dr. Gayle admitted that country unit managers at CARE were
comfortable with the current design. Organizational leaders may prefer to avoid the potential
for discomfort and confrontation inherent in comprehensive redesign.
Given the potential for discomfort, it is not surprising that executives often stick with their
existing designs long after shifting circumstances seem to demand change. They may tinker.
making marginal design change, while leaving the core of the organization intact. The status
quo had worked well for us in the past, they may conclude. Why stir up all the potential conflicts
in order to change ?6
In a dynamic environment, commitment to past design arrangements can undermine
organizational effectiveness. CAREs broadened scope, for instance, required greater
collaboration across national boundaries. When a diagnostic intervention reveals that existing
design arrangements undermine performance, organizational leaders may wish to avoid that
potential trap and decide that the negative performance consequences outweigh any perceived
advantage of conflict avoidance.
The requirement for strategic change poses what seems to be a dilemma. Organizational
redesign, to be effective, targets the entire organization. Targeting an entire organization is
difficult, however. In a large, complex company, it is downright impossible. The way out of this
apparent dilemma is through change pilots. Note that Dr. Gayle did not target all of CAREs
activities for change. Rather; she focused attention on a single-albeit a bold- project: Access
Africa . Likewise, Duke Universitys Childrens Hospital (Chapter 2
) focused its initial
transformation on a single unit: pediatric intensive care.
In both cases, leaders utilized change pilots:
individual units or processes that can provide
the opportunity for change. They are, in essence. change laboratories: opportunities to try
things out, experiment, and learn.
Building a Vocabulary of Change
Change pilots
small units or specific processes that can be targeted at the early stage
of change implementation to experiment and learn.
Theory into Practice
When implementing change, seek early wins through pilot projects.
Change pilots offer the opportunity to engage in systemic change within a small, contained unit.
In selecting a target for early pilots, organizational leaders can consider the following
• Select a self-contained unit with clear and measurable outcomes.
• Select a unit or process of strategic importance to the company.
• If the organizations strategy is changing, select a unit that exemplifies the desired future
• Most importantly, select a unit or process where success is most likely.
Early successes can build credibility and momentum, leading to more widespread
Theory into Practice
In selecting change pilots, select units where the change is most likely to be successful.
An understanding of the key issues involved in informal design will help focus the attention of
leaders, so let us turn next to an analysis of those key informal design elements that will be
addressed in a change process.
Understanding Design Challenges
Although all organizations are unique in terms of purpose and strategic direction, they face
some common design challenges:
• All organizations require some level of differentiated activities: focusing on different tasks
and customers and operating in different competitive environments.
• At the same time, integrated activities will provide organizations with the benefits of
efficiency and the ability to move knowledge and resources across and around their various
activities and units.
• All organizations, regardless of their histories, strategies, and competitive environments, rely
on some type of control mechanisms to help shape employee behaviors. They need to
deploy control mechanisms, however, without losing requisite levels of creativity and
innovative response from the employees whose behaviors they are attempting to influence.
• AU organizations must decide how and where to allocate decision-making rights and
Before embarking on a change implementation effort. organizational leaders need to appreciate
these three challenges: the challenge of integration and differentiation, of control and creativity.
and of allocating decision-making rights.
The Challenge of Differentiation and Integration
To understand the challenge of differentiation and integration, we can turn to the shifting
strategic choices made by management at SAP America. 7SAP America is a subsidiary of
Germany-based SAP AG, producer of the integrated software architecture that dominated the
enterprise systems market.
The American division faced a number of organizational challenges. Its U.S.-based strategy
supported growth through highly autonomous regional markets. Each region developed its own
processes and procedures for selling and supporting SAP software. SAPs products, however,
developed a reputation in the marketplace for being expensive, complex, slow to install, and
confusing to maintain.
New SAP America president Jeremy Coote felt the need to focus on supporting customers. In
particular, he was convinced that SAPs professional consultants, whose job it was to help
clients plan, install, and support the systemst needed to share knowledge and coordinate their
efforts across the regional markets. Customer service, in his view, was not a regional
challenge; it was national.
Here is where past design decisions-especially the heavy emphasis on regional autonomyprovided a barrier. Regional autonomy offered flexibility in response to local customers. At the
same time, it hampered coordinated national consulting support. SAPs consultants from
different regions failed to share experiences and learning with each other. Consultants
responded to the same customer issues in the Northeast and Southwest, for instance, without
communicating with each other or sharing knowledge. It was like reinventing the wheel when a
customer problem arose in, say, St. Louis. Even though the same problem had been dealt with
effectively in Phoenix, that experience had remained local. The St. Louis folks had to address
the problem as if they, and the company, had no experience with it.
In order to encourage sharing, Coote focused on his existing group of professional consultants.
After collecting performance data from the regions and setting goals for the upcoming year, he
worked with his newly hired national manager of professional consulting to redefine
responsibilities while defining nationally agreed-upon consulting roles. SAP also involved
consultants at an early stage of all new product development and implementation plans.
SAP America made a strategic choice early in its U.S. operation: to emphasize regional
autonomy as a way of spurring rapid growth. The idea-an idea that, the evidence indicates,
was perfectly valid-allowed regional managers to focus their resources and shape their
responsiveness to match the particular needs of their regional customer base.
To pursue that strategy, SAP created a design high in differentiation
, which refers to the
degree to which different functions, departments, and units in an organization are allowed to
develop their own approaches in response to their particular goals and unique competitive
Building a Vocabulary of Change
the degree to which different functions, departments, and units in an
organization are allowed to develop their own approaches in response
to their particular goals and unique competitive environments.
Theory into Practice
Use high differentiation to enable different functions, departments, and units in an
organization to develop their own responses to their particular goals and unique
competitive environments.
Paul Lawrence and Jay Lerschs classic study,Organization and Environment(1967), defined
the dynamics and challenges of differentiation and integration.8Highly differentiated designs,
they found, become reinforced not just in terms of distinctive processes and procedures, but
also in terms of cognitive and emotional orientation of employees. Comparing one highly
drtferentiated unit to another, they found that individuals within those units not
only workeddifferently but alsothought andbehaveddifferently. Individuals who work in functions
such as manufacturing, engineering, marketing , and finance , for instance, think differently about
how to approach problems and evaluate potential solutions. These differences should be
embraced rather than avoided; they are part of what helps an organization think and act in a
creative way.
Exhibit 4-2Dimensions of Differentiation
A sales
function may
have the goal
of increasing
while a
function may
have the goal
of reducing
A research
will likely have
a long-term
research and
while a sales
function will
want new
products that
it can sell by
the end of the

might believe
that they can
creativity and
by focusing all
their individual
attention on
their task,
might desire
to create rich
among key
individuals to
An assembly
operation is
more likely to
be governed
by tight rules
and strict
while a
research and
would find
such rules
stifling to
Because of the particular and differing nature of the tasks, each unit develops its own way of
working, of thinking , and of behaving. Exhibit 4-2
presents the four distinct dimensions of
differentiation. In complex organizations, differentiation relates not just to functional distinctions
but also to product and/or geographic divisions. We saw that in SAP America, where
consultants within each region developed their own patterns of thinking and behaving in
response to local customers.
Differentiation is necessary, even helpfuL It does raise its own challenges, however. After all,
the differentiated parts must also work together if the overall organization is to perform at an
exceptional level. Heres one example. With Christmas orders poured into a large retail toy
business over the Internet, the traditional functions of logistics, warehousing, and distribution
strained to the breaking point, causing a near disaster in customer relations. The manager of
thee-business unit was stunned that the rest of the organization was surprised. They acted as
if they werent expecting a Christmas surge, complained thee-business managers, while
they-the managers of the more traditional functions-retorted, It would have been helpful
if they would have kept us in the loop.9 High levels of differentiation had not been matched
with requisite integration.
refers to the required level of coordination across differentiated functions, units,
and divisions. Collaboration among differentiated units must occur, conflicts must be resolved,
and unity of effort must be achieved. Within business units, differentiated functions can, and
often do, fail to achieve the required level of integration. The same is true for multiple divisions
in large corporations where poor coordination across business can hamper efficiencies.
Building a Vocabulary of Change
the required level of coordination across differentiated functions, units,
and divisions.
Low differentiation
hampers an
responsiveness to a
complex environment
In rughly complex,
effective firms
operate here
SAP Americas
consulting service
was opemting here
Exhibit 4-3 The Challenge of Differentiation and Integration
Theory into Practice
Use integration to enable the organization to achieve efficient operations among
different functions, departments, and units.
Theory into Practice
Levels of differentiation need to be matched by appropriate levels of integration.
Differentiation is a relatively easy achievement for organizational design: Most people respond
positively to autonomy: But how is integration achieved? A number of possibilities present
• Cross-functional teams to achieve integration across differentiated functions. The challenge
becomes even greater for complex, multiunit corporations
• Global teams to help with cross-national coordination
• A strong sense of common purpose and direction combined with a unified commitment to
core values and business strategy
• Common, well-understood values applied across different business units
The particular challenges presented by multinational organizations will be explored later in this
The Challenge of Control and Creativity
A second design challenge relates to the apparently paradoxical requirements for control and
creativity. Control
refers to design elements called upon to establish order, create
predictability, and ensure efficiencies of operation. Traditional
Building a Vocabulary of Change
design choices called upon to shape employee behavior in alignment
w ith the requirements of outstanding performance .
controls rely on a number of design features: fixed job descriptions with strict individual
accountability; close, watchful supervision; a heavy emphasis on rules, procedures, and
hierarchically based differences of status and authority; pay incentives tightly linked to
performance; and information distributed on a strict need-to-know basis. 10
Traditional controls are especially congruent with a business strategy that emphasizes
predictability and standardization. Explicit rules and procedures will be useful when shaping
consistent behaviors among employees. Fast-food chain McDonalds has achieved great
success by proscribing in careful detail virtually every movement and action of its behind-thecounter employees. Stephen Robbins notes that United Parcel Service (UPS) drivers also
follow strictly delineated procedures: Its also no accident that all UPS drivers walk to a
customers door at the brisk pace of 3 feet per second and knock first lest seconds be lost
searching for the doorbell.11 When the core tasks of an organization are largely routine and
repetitive, traditional control designs may be more than adequate for the task.
Traditional controls, on the other hand, may hamper an organizations ability to achieve high
degrees of flexibility and creativity. But organizations seeking to enhance creativity and
flexibility among employees cannot ignore controls. Instead, they can call on
organic controls:
controls that rely less on specific rules and procedures and more on
shared values, clarity of organizational strategy, a common understanding about risks to be
avoided, attention to performance outcomes, and expectations of interactive and open
Building a Vocabulary of Change
Organic controls
an approach to shaping employee behavior that emphasizes shared
values, a common understanding of strategy, loosely defined roles and
responsibilities, and overall organizational performance.
Theory into Practice
Traditional controls can create predictability and standardization but can undermine
creativity, flexibility, and collaboration.
Sun Hydraulics is a Florida-based company that designs and manufactures screw-in hydraulic
cartridge valves and manifolds for industrial and mobile markets. This may seem like an
industry that would lend itself to traditional controls: lots of rules and procedures. Instead, since
its founding in 1970, Sun has leaned heavily on organic controls. Our workplace is as
distinctive as our products, the company proclaims on its web page, and provides just as
many advantages. We have no job titles, no hierarchy, no formal job descriptions,
organizational charts or departments. We have open offices, promoting open communication.
Each member of our technologically skilled, cross-trained workforce is trusted to take the
initiative and invent new ways to serve you better.12
Suns reliance on organic rather than traditional controls provides it with both a motivated work
force and a company always on the lookout for emerging market needs and creating
innovative ways to fill them.13
Companies that use organic controls expect employee behaviors to be shaped by company
strategy and objectives as well as widely shared performance information. And it is not just
small, hi-tech companies. A number of companies in a wide range of industries-Google,
Southwest Airlines, Nordstrom, United Services Automotive Association, W.L. Gore, and
SunHydraulics among them-have decided that greater reliance on organic controls will
increase the capability of employees at all organizational levels to serve customers, improve
their satisfaction with their work, and reduce employee turnover-all of which willie ad directly
to improved customer satisfaction and enhanced competitiveness.
Theory into Practice
Organic controls, which are intended to increase employee flexibility and creativity, rely
on shared values and clarity about overall strategy and performance expectations.
The Challenge of Allocating Decision-Making
At what level of the organization are decisions made about how to allocate resources, what
businesses to be in, when and how to enter new markets, or what strategies to pursue? How
about deciding what discount to give to a favored customer, which supplier to use, or how to
create work schedules in order to meet a pressing order?
All of these decisions must be made somewherein the organization. However, because they
represent different levels of decision making, they are likely to occur at different levels of the
Organizations have multiple points of decision making. The question of who makes what
decision is therefore a key design challenge. Decision-making rights
involve what Nitin
Nohria describes as the rights to initiate, approve, implement, and control various types of
strategic or tactical decisions. 14 The ideal design, Nohria adds, is one that grants decision·
making rights to those who have the best information relevant to the decision.15
Building a Vocabulary of Change
Decision-making rights
the determination of who should make what decisions in organizations .
Just where does the best information reside? That is a judgment call for organizational
leaders to make. That call can be based on a combination of company values and strategic
intent. When Robert McDermott became CEO of United Services Automotive Association (an
insurance company serving current and past U.S. armed forces officers and their families), he
decided on a strategy that would convert customers into partners. That strategy would, he
believed, take full advantage of the nature of his customer base.
In order to implement his planned strategic renewal, McDermott placed considerable
discretionary decision-making rights in the hands of employees at the lower end of the
traditional hierarchy. Telephone receptionists, for instance, had a great deal of liberty
concerning how to deal with clients who phoned in their claims. Granting decision-making rights
to individuals who dealt directly with customers, McDermott reasoned, would create a
codependent bond with customers and improve performance.
Pushing down operational decision making to employees with the best information is intended
to unleash motivation and creativity. At the same time, McDermott recognized that allocating
decision making to frontline employees needed to occur within a controlled environment. The
controls that McDermottdesigned were organic in nature, placing special emphasis on the
necessary education and training base to support that allocation. 16Ciarity of purpose and
strategy, and of values and performance expectations can support the allocation of decisionmaking rights to lower hierarchical levels.
Theory into Practice
Allowing frontline employees to make autonomous decisions is intended to unleash
motivation and creativity among those organizational members with the best
information to make decisions.
The Special Challenge of Multinational
When organizations move from operating in a single country to operating in multiple countries,
they face special challenges regarding the allocation of decision-making rights. There are
benefits, for example, in allowing the general managers of country operations high levels of
autonomy. That way, they can respond to the particular and unique challenges and
opportunities faced within their home country. These national managers possess greater
understanding than do corporate personnel of their own operational, customer, and national
issues. As a result, business units will be able to adapt in a speedy manner to shifts in their
marketplace. Such autonomy promotes what Jay Lorsch called entrepreneurial zeal among
country-based general managers.17
Too much autonomy, of course, comes with its own set of problems. For an example, we can
look at Airbus, which suffered a very public humiliation with significant delays in the production
of its A380 superjumbo jet. The double-deck, wide-bodied plane was designed to be the largesl
passenger jet ever built, boasting 50 percent more interior floor space than its nearest
competitor. The goal of Airbus was to break the dominance of Seattle-based Boeing over the
jumbo jet marketplace. Given the nature of that ambition, it would also be an intensely complex
engineering and building feat. This is where too much autonomy created problems.
For the previous three decades, Airbus had divided ilself into national centers of excellence
that encouraged depth and focus on specific aspects of the aircraft manufacturing process. The
avionics center was in France, cabin design and installation occurred in Germany, wings were
manufactured in the United Kingdom, and tail sections were built in Spain. That system allowed
for both multinational participation and technological focus.
For the multibiUion dollar A380 project, however, the focus on technological excellence and
national pride interfered with the companys ability to deliver a well-designed aircraft. Rearfuselage sections of the A380 built in Hamburg [Germany], theNew York Timesreported,
arrived in Toulouse [France] in 2004 without the requisite electric wiring for the planes in-flight
entertainment system. 18 That hand-off glitch proved to be just the beginning. The computer
modeling software used in Germany was incompatible with what was in use by the French
center of excellence.
CEO Louis Gallais took a number of steps to enhance integration. He banned the use of
national symbols in all PowerPoint presentations and formed transnational teams to redesign
Airbus into an integrated organization. Finally, the A380 made its maiden commercial flight.
Even then, the number of planes Airbus was able to deliver to commercial carriers fell far short
of promises. In the end, delays cost Airbus an estimated $65 billion in profits.
Theory into Practice
The challenge for multinational organizations is to allocate a high level of autonomy to
national units as a way of achieving marketplace responsiveness while simultaneously
making corporate-level decisions that allow the exploitation of synergies across the
Working across country units allows the corporation to exploit opportunities for synergies
the advantages of efficiency and effectiveness conferred by the combined effect of interaction
and collaboration among multiple units. For that reason, corporate executives will expect to
make some decisions that apply to all divisions.
Building a Vocabulary of Change
the advantages of efficiency and effectiveness conferred by the
combined effect of interaction and collaboration among multiple units.
The challenge for executives of multinational corporations is to seek synergies across country
divisions while maintaining an adequate level of divisional autonomy. A number of integrative
devices-planning and budgeting systems, regular interface meetings among divisional and
corporate executives, task forces, and measurement and reward systems for divisional
managers tied to corporate performance-can be used to exploit synergies.19
Building Commitment
Design choices represent attempts by organizational leaders to align employee behavior with
renewed strategies and shifting realities. Helene Gayle needed to design high levels of
collaboration across national organizations in order to address CAREs ambitious Access Africa
project. Gayle, like all organizational leaders, seeks to increase effort, energy, creativity, and
persistence among employees. That level of commitment to the achievement of organizational
goals is also determined, in large part, by informal design.
High employee commitment
exists when employees sense a strong overlap between
individual goals and the shared goals of the organization. Highly committed employees find a
sense of purpose within their organizations mission and actively seek out opportunities to fulfill
that mission. 20
Building a Vocabulary of Change
Employee commitment
the internalized desire of employees to expend energy and
discretionary effort on behalf of the goals of the organization.
Organizations able to achieve high commitment can gain a great many performance
• Highly committed employees are more likely to communicate with each other and to act in a
collaborative manner.
• Productivity, quality, and creativity are all positively associated with high commitment.
• Additionally, from the change perspective, highly committed employees will be motivated to
alter their own patterns of behavior based on the requirements of outstanding
From the perspective of organizational performance, the advantages of achieving high
employee commitment are substantial.
Theory into Practice
High employee commitment can improve organizational performance by enhancing
productivity, creativity, collaboration, and the willingness to change.
In recent years, a number of companies in widely diverse industries-manufacturing and
assembly (Lincoln Electric, for example), food service (Stake n Shake, for example), retailing
(Costco, for example), transportation (Southwest Airlines, for example), and software (SAS, for
example)-have made design choices intended to increase employee commitment. In each
case, the purpose is similar: improved productivity, increased quality, and greater flexibility and
Organizations seeking to change to a high commitment approach have followed many paths)
differing from company to company and industry to industry. However, some generalized
approaches that can be adopted in the organizational redesign stage of change implementation
• Clarify organizational goals, strategy, and values
• Allow employees greater access to managers
• Create teams
• Share performance information widely
• Rely on organic rather than traditional controls
• Offer employees opportunities for individual development
Note that these changes are all informal, leaving the formal organization systems and
structures untouched for the time being. These informal design mechanisms intended to build
employee commitment are summarized in Exhibit 4-4
Perhaps most fundamental to designing for high employee commitment is the manner in which
work is performed. Organizational leaders seeking to engage in redesign as a way of building
high commitment will benefit from a basic understanding of the options available for job design.
Rethinking Job Design Choices
Step 2 of change implementation raises the question of how individuals perform the jobs to
which they have been assigned. That question is addressed throughjob design,
which refers
to organizational expectations for how tasks will be performed in order to meet both individual
task requirements and the overall performance requirements of the organization. At first glance,
it may seem there are as many answers to that question as there are jobs in an organization. A
Building a Vocabulary of Change
Job design
the amount of task identity, variety, significance, autonomy, and
feedback built into the performance of a job.
Exhibit 4-41nformal Design Elements for Building High Commitment
Clarity of
Employees at
all levels and in
all units are
provided with an
of the goals and
values of the
organization as
well as its

A variety of
formal (elected
board of
and informal
(open doors
and accessible
enable wide
participation in
the dialogue
and dec_
making of the
designated to
Employees kept
informed about
how the
organization is
including the
dissemination of
data such as
information on
and feedback
from customers.
Control exerted
through peer
culture, and
expectations of
provided an
through a
combination of
mechanismsjob mobility,
task variety,
supervision, and
formal training
-to develop
consistent with
their own needs
and those of the
examination, however, reveals a set of underlying principles that shape job design choices and
impact the commitment, adaptability, and performance of jobholders.
In search of high commitment, managers ask: how might they think about designing jobs in
order to enhance their potential to evoke initiaUve and motivation? Richard Hackman and Greg
Oldham offered a job characteristic model to suggest alternative job design options meant to
enhance motivation and initiative. 22
All jobs, they said, regardless of specific organizational levels or assigned responsibilities, can
be understood as having the same core dimensions. By enhancing or enriching work on any or
all of those dimensions, jobs will become more motivational. Exhibit 4-5
presents the five
universal job dimensions as well as sample actions managers can take to enrich work and
increase employee commitment.
Theory into Practice
By enriching jobs along any or all of five characteristics-skill variety, task identity, task
significance, autonomy, and feedback-organizations can increase the motivation and
commitment of employees performing those tasks.
Managers seeking to change job design as a way of enhancing employee commitment have
something of a road map. Takeski// variety as an example. Instead of having an employee
perform a single job over and over again, the
Exhibit 4-5 Using Job Enrichment to Increase Commitment
Skill variety
The degree
Enlarging task
to which job
requirements to
requires a
involve multiple
variety of
and varied
activities in
carrying out
the work,
involving the
use of a
number of
different skills
and talents
The degree
to which the
individuals into
job requires
a team with
completion of
a whole
for the final
piece of
work; that is,
doing job
beginning to
end with a
The degree
to which the
regularly and
clearly how
of the task
individual and
has a
group effort
contributes to
impact on
performance of
that are
the company.
deemed to
be important
to the
and/or to
society as a
The degree
I to which the
individuals or
job provides
groups to
schedule work
discretion to
and assign
the Individual
spedfic tasks
in scheduling
consistent with
work and
for carrying it
The degree
to which
carrying out
toward work
required by
the job
results in the
direct and
about the
of his or her
skills required of that worker in the performance of his job could be enlarged. A machine
worker, for instance, might be asked to meet with suppliers or customers. By adding some
measure of discretion to that employees scheduling-say, providing that employee with a
monthly production schedule but allowing the individual to make decisions concerning daily and
weekly production schedules-managers could also enhanceautonomy.
Providing regular information about the quality of work and the progress being made toward
achieving the goal adds greater feedback. Communicating regularly to that employee about
how her effort contributes both to the overall product or service being offered by the company
and how that product or service helps advance the strategic purpose of the business
enhances task identity and significance. The job characteristics model offered a systematic way
of redesigning jobs in order to build employee commitment and achieve outstanding
performance for the organization.
Building Collaboration
As we saw in the opening case of this chapter, Dr. Helene Gayle sought to build collaboration
at CARE so as to make the whole greater than the sum of its parts. In his study of
collaboration in business organizations, Morten T. Hansen notes how collaboration helped
Apple leverage its capabilities to overcome Sony and gain dominance in the MP3 portable
music players market. 23
Sony had all but invented the portable music market with its Walkman, a devise originally built
to meet Sony Chairman Akio Moritas passion for opera. Introduced to the public in 1979, the
Walkman allowed the listener to play audiotapes (and later, CDs) using headphones. The
devices were portable and easy to use. They held only one tape or CD at a time, of course, and
required the owner to purchase the music independently of the listening device, with Sony
capturing none of that revenue (except for music on the record labels owned by Sony).

In the late 1990s, several companies launched commercial versions of MP3 players with their
own hard drives, eliminating the need to purchase separate tapes or COs. Now, for the first
time, music could be loaded directly on the listening devise. The MP3 market remained
relatively unsettled until 2001, when Apple launched its revolutionary iPod. Coupled with
iTunes, Apple quickly dominated not just the device market but also music sales and
distribution, thereby capturing a much larger portion of the total revenues.
As revolutionary as it might have seemed, the iPod itself contained very little in the way of
innovative technology. What made the iPod remarkable was not its components. Rather, the
iPod represented a design triumph. 24 And that triumph came about because of collaboration.
What was especially vital was that Apple promoted a seamless interaction between its
hardware and software units, as well as between its iTunes and industrial design units. After all,
one of the factors that made the iPod so attractive was the ease of interacting with iTunes as a
way of purchasing and downloading music from the Internet onto the player.
Collaboration involves willing cooperation among individuals and groups with a common goal.
Helene Gayles notion that CARE needed collaboration across national units to make the whole
greater than the sum of its parts lies behind an organizations desire to promote collaboration. It
was collaboration among hardware and software units in particular that helped Apple triumph in
the portable music business. But why couldnt Sony respond effectively to Apple? It was, says
Hansen, the inability of the company to collaborate effectively.
Building a Vocabulary of Change
a process of willing cooperation among individuals and groups with a
common goal.
Although still committed to its Walkman portable music player, Sony mounted a response to the
iPod in 2003. Under the guidance of Howard Stringer and Phillip Wiser, head of Sonys U.S.
operations and chief technology officer for Sony U.S. , respectively, Sony attempted to take
advantage of its considerable assets.25 In terms of overall revenue, Sony was 10 times bigger
than Apple. All the pieces seemed to be in place. The Walkman division could develop its own
hard drive machine. In addition, Sonys various business units-VAIO personal computers,
Sony Music, and Sony Electronics-could pull together to produce an iPod rival in nine
months promised Wiser. Even the name of the product, the Connect, suggested Stringer and
Wisers faith that collaboration across Sonys business units could help the company respond to
In nine months, the Connect waslaunched, but it was a commercial flop. Stringer blamed the
failure on the inability of the various Sony units to collaborate. Its impossible to communicate
with everyone, Stringer said, when you have so many silos. Listen to this description
provided by Morten Hansen:
Each division had its own ideas about what to do. The PC and the Walkman groups introduced their
own competing music players, and three other groups- Sony Music in Japan, Sony Music in the
United States, and Sony Electronics in the United States-had their own music portals or download
services. Stringer, who had no authority over Japanese operations, complained, to no avail, that the
Connect software being developed in Japan was hard to use. Whereas the U.S. team wanted a hard
disk for the music player, the Japanese team went with the arcane MiniDisc. And whereas the U.S.
group pushed for using the MP3 format-the de facto U.S. standard-the Japanese PC division chose
a proprietary standard called A TRAC. 26
In 2007, Sony announced its intention to withdraw the Connect from the market. And in 2010,
nine years after the introduction of the iPod, Sony discontinued Japanese manufacture of its
once iconic Walkman.
There are, as the iPod story suggests, compelling reasons for a business to build collaboration
and integration across divisions. To promote collaboration, companies frequently turn to
teams. Teams, which are interdependent groups with shared responsibility for an outcome,
come in many forms: product development teams, project management teams, customer
service teams, and process innovation teams. A summary of the main team prototypes is
presented in Exhibit 4-6
Building a Vocabulary of Change
an interdependent group of individuals with shared responsibility for an
Theory into Practice
Collaboration will require effective teamwork across units and functions of an
Exhibit 4-6 Team Types
Work team
By sharing
multiple skills,
and performing
varied tasks,
motivation and
quality are
rather than
activities, speed
to market and
innovation are
enhanced while
associated with
rework are
By bringing
solving team
individuals from
associated with
handoffs and
interactions can
be creatively
The multiple
functions and
tasks of the
value chain are
linked in order
to enhance
and customer
Cross-Functional Teams
Traditional organizations are often made up of a collection of freestanding functional silos.
Activities such as market research, design, engineering, manufacturing, quality checking,
distribution, and sales all take place within discrete domains. Although those functional units
provide required differentiation, organizations also need to achieve integration across functions
in order to be effective.
Cross-functional teams,
which are teams that span multiple organizational functions,
provide a way of achieving that integration. Cross-functional teams address the difficulty of
highly differentiated functions have in pulling together into seamless, well-integrated processes.
By creating cross-functional teams, organizations seek to eliminate hand off problems that
produce waste, high cost, quality problems, and sluggish response time. The teams are
intended to create a seamless, interconnected w~b of activities. 27
Building a Vocabulary of Change
Cross-functional teams
teams made up of representatives from multiple organization functions
typically intended to achieve required coordination along a chain of
interrelated activities and processes.
Theory into Practice
Use cross-functional teams to help create seamless, well-integrated processes.
Creating Teamwork
The first requirement of effective teamwork is that team members transcend the individual or
functional agendas each member brings to the effort and create a shared purpose. Team
members agree both on what their goal is and why that goal is important.
Creating shared purpose can be a slow and difficult process. Individuals who have spent much
of their professional lives within a function or unit adopt, often unconsciously, a particular lens
through which they view all organizational problems. When they become members of a crossfunctional team, their agenda-at least initially- is to optimize the interests of their own functio n
or unit, often at the cost of others. Effective teamwork starts with the need to create a central
purpose focused on companywide goals and equally accepted by all members.
Theory into Practice
Dont just place employees on teams and expect the performance benefits of teamwork;
organizations need to create the context required for teamwork.
Effective teamwork is unlikely to flow from a group of individuals who do not feel equally and
jointly accountable for an agreed-upon outcome. Therefore, effective teams develop shared
responsibility. On effective teams, members evolve beyond seeing themselves as individuals
with narrowly defined and measured outcomes. Instead, they take full responsibility for and joint
ownership over every aspect, every contribution, every input, and every outcome of the teams
Theory into Practice
When members of a team feel equally responsible for the outcome of their efforts,
teamwork is enhanced .
Theory into Practice
At least in the early stages of change, organizations need to make sure teams are
buffered from traditional hierarchical power and are allowed to work across functions.
Theory into Practice
In order to encourage teamwork, organizations can take care to ensure that team
members have the appropriate skills to perform the task effectively.
Effective teamwork also requires that team members possess a set of behavioral
competencies, including critical thinking, brainstorming, problem solving, nondefensive
communications, process facilitation, and conflict management. Many employees lack those
skills. They have, after all, spent the better part of their lives learning how to work, think, and act
as individuals. If an organization intends on enabling teams to operate effectively, then they
have to provide individuals with the required competencies of teamwork.
Not surprisingly, as companies evolve toward reliance on teamwork, they increasingly require
training for these required skills. Much of that training focuses on providing employees with
multiple skills to enable them to understand all parts of the organization so they can operate
more effectively in a cross-functional environment. 28Training in specific teamwork skills also
becomes vital. One of the most striking findings of a recent international study of highperforming companies (rated by profits, productivity, and quality of output) was that 100 percent
of the high performers had trained their employees in problem-solving techniques compared to
less than 20 percent of the low performers. 29
Ultimately, no matter how successful an organization might be in creating teams, the success of
teamwork depends on a culture and a context within the larger organization that supports
coordinated efforts: recruiting and developing individuals with teamwork competencies; holding
team members jointly accountable for joint efforts; removing barriers to effective crossfunctional coordination.
All of these actions help create a context in which teams-and, more importantly, teamworkare simply part of the way of operating. Most important of all, teamwork in the operations of the
organization relies on teamwork at the top of the organization.
Theory into Practice
Teams succeed or fail in organizations based not just on the efforts of team members
but on the overall design and context of the organization, which must support and
reinforce joint efforts.
Organizational design refers to the ways an organization defines roles that employees enact
and relationships among employees both within their own functions, units, and divisions as well
as across those boundaries. No matter how well designed an organization may be at any one
time, a dynamic competitive environment is likely to demand that the design be reconsidered.
Poor coordination, high levels of dysfunctional conflict, slow decision making, and low
responsiveness to shifts in the external environment are all symptomatic of an organization
whose design has outlived its functionality. When a diagnostic intervention reveals that these
types of issues hinder the implementation of an organizations strategy or the achievement of
outstanding performance. leaders will need to consider addressing the redesign challenge as
the next sequenUal step in the change process.
That does not mean, however, that all design issues need to be addressed at an early stage of
change implementation. Organizational design has two interrelated but separate components.
Formal aspects of design relate mainly to reporting relationships as depicted on the official
organization chart and systems such as pay and performance measurement. Informal elements
of design relate to how an organization meets the challenges of differentiation and integration,
of controls and creativity, and of decision-making allocation. Informal design also encompasses
how an organization seeks to build employee commitment and coordination.
Both elements of design-formal and informal-need to be addressed in a change
implementation process. It is useful, however, to separate the two sequentially: addressing
informal design challenges first and formal design challenges later. Effective change
implementation requires experimentation and learning. No. leader knows precisely what
solutions will be needed. Even if she did, the impositions of solutions from above would
engender resistance.
When design changes are informal, employees at multiple levels and from numerous units and
divisions can try things out. Ideas on how to approach the challenges posed of differentiation
and integration, the tension between control and creativity. and the allocation of decisionmaking rights can be tested: maintained if they succeed, discarded otherwise. As
experimentation and learning unfold, employees can seek to refreeze (Lewins term-see
Chapter 2
) desired behaviors by calling on more formal design mechanisms.
The next step in the change implementation process involves addressing an organizations
human resource policies and practices, both as a way of helping to develop required new
behaviors and of reinforcing those behaviors among the organizations employees.
Discussion Questions
1. Why do organizations find it so difficult to address the requirements of differentiation
and integration simultaneously?
2. What are the advantages and disadvantages of allowing for high levels of autonomy
within divisions of multidivisional organizations? What are some effective means of
coordinating efforts among divisions?
3. Why is it so difficult to achieve high levels of employee commitment within todays
business organizations? List the factors that are working against commitment and the
potential benefits to be achieved through high commitment.
4. Some people have argued that there is far too much emphasis on teamwork in
todays business world and that the danger is that individual creativity and initiative is
being sacrificed. Do you agree or disagree? Explain.
5. The chapter argues that change efforts should address informal design before
addressing formal design. Do you agree with that theory? Explain your thinking.
Case Discussion
Read Transferring Innovation across National Borders and prepare answers to the following
1. What triggered the new product strategy at Minnesota Biolabs (MB)?
2. What prediction would you make for the success of getting the country general
managers in Europe and Japan to adopt the new product? Explain your prediction.
3. What changes might MB make in its design in order to better promote the transfer of
new products across national borders?
Transferring Innovation across National Boundaries
Imagine entering a hospital for treatment of a medical condition only to come down with a far
more serious, perhaps even life-threatening disease caused by that very treatment. 30 That,
unfortunately, is an increasingly common experience in hospitals located in the United States
and elsewhere. The culprit is often an infection transferred to the patient through a tainted
injectable: that is, a needle, an IV drip, and so forth. This is known as a sepsis infection: an
overwhelming infection of the blood stream resulting from toxin-producing bacteria
(endotoxins) . National health regulatory agencies seek to limit such negative outcomes by
requiring that products intended for injection be tested.
Minnesota Biolabs
Traditionally, tests for sepsis infection were performed on live animals-rabbits, for the most
part- lead to the animals death. Minnesota Biolabs (MB) was one of the companies that
supplied rabbits to the producers of injectable devices. Headquartered in suburban
Minneapolis, MB served customers-mainly pharmaceuticals but also university and private
laboratories-in over 20 countries. Europe was divided into three MB national units, MBFrance, MB-Germany, and MB-United Kingdom. A fourth country unit, MB-Japan, served Asian
Each of those four units- · France, Germany. the United Kingdom, and Japan-was managed
by a country general manager. That general manager was typically left alone to operate his or
her unit autonomously. Corporate headquarters set annual growth goals for the units and
measured their profit and loss. As long as the units performed according to those goals, the
managers were paid a bonus and mostly left alone. Strategies, product decisions, and
acquisitions were determined by corporate executives in the States and communicated to these
country managers.
MBs CEO frequently said that he liked this approach to management because it delineated
clear lines of authority and responsibility. Country managers also preferred this autonomy. They
were allowed, they believed, to decide on local strategies that best served their customers while
maintaining good relationships with the national regulatory agencies to which they needed to
respond. MBs exceptional history of sustained , profitable growth reinforced the belief of
managers that this was a well-designed organization.
The Search for an Alternative Test
In the early years of the 21st century, MB began to look for an alternative method of testing for
sepsis infection in injectable products. As animal rights became increasingly important,MB
sought a methodology that would leave the animals alive. Because most of MBs growth over
its history had come from acquiring other businesses and integrating their products into the
companys offering, that is what MB executives sought to do now.
An opportunity arose when a small, Rhode Island-based company received government
approval for a test known as Sepsis Detection Test (SOT). Instead of conducting tests in live
rabbits, SOT used blood extracted from horseshoe crabs for the tests. After extraction, the
crabs were returned to the ocean where they were able to regenerate lost blood. MB purchased
the company, and horseshoe crab-based testing quickly became the standard for the United
States. In addition to leaving test animals alive, SOT was both less costly and more profitable
for MB than the previous rabbit tests.
After several years of rapid growth in its home market, MB executives urged country general
managers in Europe and Japan to move from rabbit-based tests to SOT. At the annual strategy
meeting in Minneapolis, corporate executives presented the business case for SOT and urged
the country general managers of MB-France, MB-German, MB-United Kingdom, and MB-Japan
to switch over their product line. The
general managers agreed to move forward
quickly as possible.
Quoted on the CARE website: © Cooperative for Assistance and Relief Everywhere, Inc.
Quoted in Rasika Welankiwar, Conversation,Harvard Business Review (Apr. 2009), p. 22.
Michael Beer, Russell A. Eisenstat, and Bert Spector, The Critical Path to Corporate
Renewai(Boston, MA: Harvard Business School Press, 1990).
Michael Goold and Andrew Campbell, Do You Have a Well-Designed Organization? Harvard
Business Review (Mar. 2002), p. 5.
Danny Miller has documented the tendency of once-successful companies to avoid design change.
SeeThe Icarus Paradox: How Exceptional Companies Bring About Their Own Downfall (New York: Harper
Business, 1990).
Information on SAP America is from ASAPs a Wrap ,Managing Automation(February 1998);
Colleen Frye, SAP Soothes Implementation Worries , Software Magazine (1997); and David A.
Garvin,SAP America(Boston, MA: Harvard Business Schooll Publishing, 1996).
Paul R. Lawrence and Jay W . Lorsch,Organization and Environment: Managing Differentiation and
Integration (Boston, MA: Harvard Graduate School of Business Administration Division of Research,
These quotes come from a consulting engagement by the author.
Richard E. Walton, From Control to Commitment in lhe Workplace, Harvard Business
Review(Mar.- Apr. 1985), pp. 5-12.
11 .
Stephen P. Robbins, Essentials of Organizational Behavior (Upper Saddle River, NJ · Prentice-Hall,
2005), p. A-3.
Nitin Nohria,Note on Organization Structure (Boston, MA: Harvard Case Services, 1991), p. 2.
Ibid., p. 3.
McDermott is quoted in Thomas Teal, Service Comes First: An Interview with USAAs Robert F.
McDermott, Harvard Business Review( Sept.-Oct. 1991 ), p. 119.
Jay W. Lorsch, Note on Organization Design(Boston, MA: Harvard Business School Publishing,
1975), p. 15.
Nicola Clark. Turnaround Effort Is Challenging at Airbus, a Stew of European Cultures,New York
Times(May 18, 2007) , p. C1.
Jay W. Lorsch and Stephen A. Allen IU,Managing Diversity and Interdependence: An
Organizational Study of Multidivisional Firms (Boston, MA: Harvard University Graduate School of
Business Administration Division of Research, 1973), pp. 53-79.
Daniel Goleman, Working with Emotional Intelligence (New York: Bantam Books, 1998), p. 118.
21 .
Robert M. Marsh and Hiroshi Mannari. Organizational Commitment and Turnover: A Prediction
Study,Administrative Science Quarterly 22 (Mar. 1977), pp. 57-72; Walton, From Control to Commitment
in the Workplace; Gary J. Blau and Kimberly B. Boal, Conceptualizing How Job Involvement and
Organizational Commitment Affect Turnover and Absenteeism.Academy of Management Review12
(1987), pp. 288-300; Stephen L. Fink. High Commitment Workplaces (New York: Quorum Books, 1992);
Mark A . Huselid, The Impact of Human Resource Management Practices on Turnover, Productivity, and
Corporate Financial Performance,Academy of Management Journa/38 (1995). pp. 635-661; Julian
Gould-Williams, The Effects of High Commitment HRM Practices on Employee Attitude: The Views of
Public Sector Workers ,Public Administration82 (2004). pp. 63-81 .
J. Richard Hackman and Greg R. Oldham, Work Redesign (Reading, MA: Addison-Wesley, 1980).
Morten T. Hansen, Collaboration: How Leaders Avoid Traps, Create Unity, and Reap Big
Results (Boston, MA: Harvard Business School Press, 2009).
Erik Sherman, Inside the Apple iPod Design Triumph, Electronics Design Chain, accessed Oct.
27, 2010.
This account from Hansen,Collaboration, is based in large measure on the Wall Street
Joumalreporting of Ph red Dvorak. See particularly Out of Tune: At Sony, Rivalries were Encouraged,
Then Came the iPod (June 29, 2005), p. A 1.
Hansen,Collaboration, p. 8.
The notion that coordination across functions. units, and divisions lies at the core of organizational
effectiveness has received a great deal of attention in recent years. See, for instance, Edwad E. Lawler, Ill,
Substitutes for Hierarchy,Organizationa/ Dynamics 17 (1988), pp. 5-15; Christopher A. Bartlett and
Sumantra Gloshai,Managing Across Borders: The Transnational Solution (Boston, MA: Harvard Business
School Press, 1989); D. Keith Denton,Horizontal Management: Beyond Total Customer Satisfaction (New
York: Lexington Books. 1991); John A. Byrne, The Horizontal Corporation,Business Week(Dec. 20,
1993), pp. 76-81; Jay R. Galbraith, Competing with Flexible Lateral Organizations(Reading, MA: AddisonWesley, 1994).
David Nadler, Ten Years After: Learning About Total Quality Management. A paper delivered at
the Total Quality Management conference sponsored by the Management Centre Europe, Brussels, Oct.
International Quality Study, Best Practices Report: An Analysis of Management Practices That
Impact Performance(Cieveland, OH: American Quality Foundation and Ernst & Young, 1992).
This case study is adopted from the research conducted by the author and his colleagues under a
grant from the National Science Foundation. See Bert Spector, Henry W . Lane, and Dennis Shaughnessy,
Developing Innovation Transfer Capacity in a Cross-National Firm,Journal of Applied Behavioral
Science45 (June 2009). pp. 261-279.

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