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«Looking for synergy in organizations: The role of the concept of configuration in contemporary theory Raf Sluismans 2003-005 MERIT – Maastricht ...»

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MERIT-Infonomics Research Memorandum series

Looking for synergy in

organizations: The role of the

concept of configuration in

contemporary theory

Raf Sluismans

2003-005

MERIT – Maastricht Economic Research International Institute of Infonomics

Institute on Innovation and Technology

PO Box 616 c/o Maastricht University

6200 MD Maastricht PO Box 616

The Netherlands 6200 MD Maastricht T: +31 43 3883875 The Netherlands F: +31 43 3884905 T: +31 43 388 3875 F: +31 45 388 4905 http://meritbbs.unimaas.nl http://www.infonomics.nl e-mail:secr-merit@merit.unimaas.nl e-mail: secr@infonomics.nl

LOOKING FOR SYNERGY IN ORGANIZATIONS:

THE ROLE OF THE CONCEPT OF CONFIGURATION IN CONTEMPORARY THEORY

Abstract The aim of this article is to add to organization theory by exploring the theoretical concept of organizational configuration and identifying its added value. Why is it used and what possibilities does it offer for organizational theorists? We will examine the underlying assumptions and try to produce a sound definition of configuration. This article is based on 77 articles and books from which we identified 6 authors as being the main theorists for configuration theory.

JEL Codes: B31, D21, D23, D29, O33, O39 Keywords: organization theory, configurations, strategic management Introduction Herbert Simon stated that “everyone designs who devises courses of action aimed at changing existing situations into preferred ones” (Ehn 1988 p. 157, Simon cit. p. 54). The process Simon is referring to here is fundamental for organizations trying to stay ahead of their competitors. Unfortunately, despite a wide range of theoretical approaches, the underlying mechanisms and logic responsible for success in organizations remain largely inexplicable. Lately, the concept of ‘organizational configuration’ has been increasingly used in publications on the performance of companies. Although promising in this context, the study of organizational configurations encompasses a variety of research streams (Ketchen 1997 p. 224; Ferguson 1999 p. 385). Common agreement on what configurations are and how they are to be used is practically lacking. Porter, for instance, uses ‘configuration’ to explain the redesign of organizations to achieve competitive advantage (Porter 1996). Miller on the other hand argues that ‘configurations’ are about social entities which derive their meaning from the whole (Miller 1987). These are only two examples of how the concept is used. For these, but also for the other authors discussed in this article, it is apparently tempting to use this concept because it is a vehicle to describe certain characteristics or dynamics of organizations. The aim of this article is to add to organization theory by exploring the theoretical concept of organizational configuration and identifying its added value: Why is it used and what possibilities does it offer for organizational scientists?

According to Sutton and Staw (Sutton 1995 p. 372), the process of building theory is full of internal conflicts and contradictions. This could be a possible reason for the confusion in theoretical streams and concepts that we found to be characteristic of articles on organizational configurations. In 27 out of the 77 articles we have read, the authors fail to give a definition of configuration at all; 26 authors cite other authors and use them as a basis for their work; 24 develop their own definition, which is sometimes based on the work of others, but to a larger extent deviates from existing definitions. To help authors construct good theories, Sutton and Staw (Sutton 1995 p. 372) made a list of five features of scholarly articles that do not constitute theory but, instead, are references, data, lists of variables or constructs, diagrams and hypotheses. Although each of these features has vestiges of good theory, the key to this list lies in the context (Weick 1995 p. 389). When referring to Sutton and Staw, Weick (Weick 1995 p. 389) argues that if prior and subsequent steps in theorizing are merely more of the same, then the theorizing is less robust and promising. Theorists should be moving away from one of the five, through a second of the five, on to a third of the five. Kaplan and Merton (Sutton 1995 p. 378) state that theory is the answer to questions of why. Strong theory delves into the underlying processes so as to understand the systematic reasons for a particular occurrence or non-occurrence (Sutton 1995 p. 378). In the majority of the articles studied, the authors do not meet the criteria of good theory described above.

According to Morgan (Morgan 1980 p. 605), organization theorists, similar to scientists from other disciplines, often approach their subject from a frame of reference based on assumptions that are taken for granted. A widely used vehicle for this custom is a metaphor. The process of metaphorical conception is a basic mode of symbolism, central to the way in which humans forge their experience and knowledge of the world in which they live (Morgan 1980 p. 610). We agree with Morgan that a metaphor is a creative form that produces its effect through a crossing of images. Using metaphors, meaning is transferred from one situation to another: new words and meanings are created as root meanings are used metaphorically to capture new applications (Morgan 1980 p. 610). Morgan states that one of the major metaphors in organization theory is that of the organism which is used to refer to “any system of mutually connected and dependent parts constituted to share a common life” (Morgan 1980 p. 614). Logically, different metaphors can constitute and capture the nature of organizational life in different ways, each generating powerful, distinctive, but essentially partial kinds of insight (Morgan 1980 p.





612).

In our opinion the concept of the organization as a configuration is a metaphor, just like the organization that is described as being an organism. During their quest for insight into how things in organizations function and interact, organization scientists use this concept of configuration, which evokes associations with information technology and computer science. In different dictionaries we found the following descriptions of

configuration:

1 Arrangement of parts or elements

Computer science:

1 The way in which a computer system is set up: changed the configuration by resetting the parameters.

2 The set of constituent components, such as memory, a hard disk, a monitor, and an operating system, that make the computer system.

3 The way that the components of a computer network are connected.

(A.H.D. 2000) 2 Form, as depending on the relative disposition of the parts of a thing’ shape; figure (Webster's 1996) 3 An arrangement of parts or elements; “the outcome depends on the configuration of influences at the time” [syn. Constellation] (WordNet 1997) 4 The arrangement of the parts of something [from Late Latin configuratio a similar formation, from configurare to model on something] (Collins' 1982) It is not only because of the increasing use of the concept, but mainly because of this apparent usability in getting closer to the truth as to how things in organizations happen, that this concept deserves to be explored. This article tries to give an overview of how the concept is used and to identify the stage of development of the theory. We will examine the underlying assumptions, look for the added value for organization scientists, and try to produce a sound definition of configuration.

Methodology

This article is based on the 77 articles and books listed in table 1. We started our literature search by scanning the electronic indexes of 13 scientific journals. Randomly ordered, the titles of the journals are: Harvard Business Review, Strategic Management Journal, Administrative Science Quarterly, Academy of Management Journal, Journal of Management, Academy of Management Review, Management Science, Scandinavian Journal of Management, International Business Review, Organization Science, Organization Studies, Journal of Management Studies, International Studies of Management and Organizations.

The literature search is characterized by three phases. First, while scanning the electronic indexes, we explicitly looked for the word ‘configuration’ in the titles of the articles, published between January 1995 and March 2002. Second, while reading the articles, we paid attention to the references. Although not always explicitly related to configurations, references we came across repeatedly were also included in our analysis, which explains the presence of books. Finally, we also had an automatic search running on Elsevier Science Direct. Our query comprised the word configuration in the abstract, title and keywords for all journals.

To answer our central question – what is the added value for organization scientists of using the concept of organizational configuration? – we looked at the definitions of configuration given by the various authors. Because the number of authors and different definitions were quite large, we used two strategies to imply a certain structure. The first was a scan of all article references and a search for a pattern in articles that where cited most. We plotted down how often different authors make references to what we thought of as the major theoretical works in configuration studies. On the basis of this first strategy we were able to draw two conclusions. First, some authors make no reference to those we considered the most important for configuration theory. Second, some authors developed their own definition of organizational configurations, which is largely deficient from those we conceived as most important. Following on from these two conclusions, the second strategy was to look for common elements in all definitions.

In this manner we hoped to exceed the major theoretical works and take into account all authors.

When discussing the different authors we thought of as most important for the theory on organizational configurations, we do so in alphabetical order for two reasons.

The first is that we found it impossible to rank the authors according to the extent to which their contributions were of influence to others. Thus, we chose not to order the authors by the year of publication, hoping to avoid any suggestion of a kind of natural evolution in configuration theory. We will see that different authors were working on similar matters at different places and different times.

The second reason is that some authors wrote several contributions on the subject. In those cases, we chose to group their different contributions, thus including their multiple works while not adding to the complexity of this article with a chronological overview of the evolution of one author’s work. As a consequence, the definitions, characteristics and terminology discussed in relation to these authors stem from their different works taken together. We try to give an idea of what a certain theorist stands for in theory on organizational configuration in general, not what he stands for at a specific moment in time.

After presenting the results of our literature study and the subsequent conclusions, we introduce two case studies: VEBA-Wohnen (Tuma 1998) and Palm Inc.

(Yoffie 2001). These two case studies illustrate how the conclusions and theoretical concepts from the literature study can be recognized in everyday organizations. This section will conclude with a practical translation of the conclusions we gained from theoretical concepts in our literature survey.

–  –  –

Table 1 References ordered by year of publication Literature study In the introduction we pointed out that the majority of the authors studied do not meet the criteria of good theory described by Sutton and Staw (Sutton 1995). As we have seen previously, one of the reasons for scientists to use the concept of organizational configuration is because it is a metaphor. This is in line with Morgan (Morgan 1980 p.

605), who states that scientists from different disciplines approach their subject from of a frame of reference based on assumptions that are taken for granted. To justify these claims, but also to provide a background for our conclusions in relation to the characteristics of organizational configurations and the reasons for the different authors to use it, we will now present our empirical findings.

In the introduction, we reported that 27 authors fail to give a definition whatsoever while 26 cite and use others as a basis for their work, and 24 develop their own definition. To structure this variety, we plotted down how often different authors make references to others. This exercise enabled us to single out 6 authors or author pairs that may be considered as main theorists for configuration theory (the cited

references come from the contributions we have read):

• Lawrence and Lorch (Lawrence 1977)

• Miller, Danny (Miller 1980; Miller 1987; Miller 1996)

• Mintzberg, Henry (Mintzberg 1987; Mintzberg 2001)

• Porter, Michael (Porter 1996; Porter 2000; Porter 2001)

• Meyer (Meyer 1993)

• Miles and Snow (Miles 1978) Table 2 presents the complete overview of the works in which these authors were cited.

–  –  –

Table 2 Overview of authors citing the six main theorists of configuration theory This overview only illustrates which authors cite the six main theorists. It is impossible to conclude from this table which author had the largest influence, because references are related to all the works included in our review. A reason for this could be that the importance or indirect influence of the six authors mentioned is large to the extent that others use them in their conceptualizing while not explicitly using the terminology of the latter mentioned authors. This is why we arranged them alphabetically. Some of the articles were written by multiple authors, but we chose to mention the main authors only.



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