Organization structure theories and open innovation paradigm

Abstract

Purpose

The impact of the e-globalization combined with staggering costs for R & D across industries has resulted in the call for new approach to innovation where openness and interconnectivity is the role. This new approach is designated as “open innovation”. The new paradigm calls for the sharing of knowledge and resources in conducting innovation activities within and among organizations. As such, one needs to re-orient the structure of the organization to meet these new requirements. On the conceptual level, it becomes a significant undertake to try to grasp how our traditional understanding of the organization can be fitted within the requirements of the open innovation when the environment of the e-globalization is taken in consideration. The purpose of this paper is to discuss the question of how organization structure theories can be coupled to the open innovation paradigm. Out of that analysis the authors propose a new theoretical framework of organizational analysis that takes both the classical knowledge and the new economic context of e-globalization.

Design/methodology/approach

The contemporary period is recognized by the term “new economy”, as a replacement for the “old economy”. Another term of importance is “globalization”, which is coupled to the issue of economy categorization. Humanity launched the modern age of globalization some decades ago, but we are going through a new type of globalization, e-globalization. In the e-globalization, processes are induced basically by the impact of the new tools of communication and information technologies. These dynamic processes have forced a re-thinking of the traditional innovation practices. In the paper, the authors reflect on the changes in relation to the traditional knowledge about organization structure, using a deductive approach and textual analysis and relate that to the requirements of an open innovation paradigm. In the process, the authors introduce the basics of the “theory of internetisation dynamics” as a new potential organizational theoretical framework.

Findings

From the analysis, it was found that some traditional concepts about organization structure and organizing mechanism theories are responsive to the needs of the open paradigm settings while other theories are not. However, each of these is able to contribute to one of the five components of the theory of internetisation dynamics.

Originality/value

The authors argue that by using the correct framework for the analysis of the organizational structure, one can propose a set of strategic steps which would help the companies to re-structure. That would save time and effort for policy-makers and managers of firms, as well as researchers active in this field of organization and organizing processes, who are focused on the open innovation transformation requirements of the firms. Running this analysis would add some input into organizational re-orientation in troubled sectors such as in pharmaceutical industries.

Citation

Abouzeedan, A. and Hedner, T. (2012), "Organization structure theories and open innovation paradigm", World Journal of Science, Technology and Sustainable Development, Vol. 9 No. 1, pp. 6-27. https://doi.org/10.1108/20425941211223598