INNOVATIVE FORMS OF ORGANISING (INNFORM)

Late 1996, a research project was started at the FIM-HSG aimed at investigating a new organisational form, which appeared to rely on company internal networks rather than traditional hierarchies. This new organisational form had been termed the internal network organisation or ‘N-form'. Elements of N-form or similar new types appeared to include:
- a radical decentralisation of profit responsibility to operating units;
- a reliance on internal contracting mechanisms;
- flattened organisational hierarchies;
- restricted head-office roles, with top management focused on knowledge creation and dissemination;
- a shift from `command and control' management styles to `facilitate and empower';
- highly elaborate formal and informal internal communications systems, lateral as well as hierarchical;
- an extensive use of ad hoc inter-divisional and inter-functional conferences, task forces and teams, rather than rigid organisational compartmentalisation; and
- the deliberate construction and use of internal labour markets for the dissemination of knowledge.

To investigate these claims, an international research consortium was established among eight leading business schools a University of Warwick (UK), Oxford University (UK), Duke University (United States), Erasmus University Rotterdam (Netherlands), Hitosubashi University (Japan), IESE (Spain), Jönköping University (Sweden) and the University of St. Gallen (Switzerland). The lead researchers from these partner institutions are respectively, Andrew Pettigrew, Richard Whittington, Arie Lewin, Frans van den Bosch, Tsuyoshi Numagami, Carlos Sanchez Runde, Leif Melin and Winfried Ruigrok.

This international research team set out to:
- establish the differences between the traditional hierarchical structures and this new network form organisation at a theoretical level;
- survey the extent to which this new organisational form has actually been implemented amongst large and medium-sized firms across Europe and large firms in Japan;
- examine the managerial processes by which transition from traditional organisational forms to this new form is actually achieved.

During late 1996 and early 1997, we administered a survey among 1500 UK firms and 2000 continental Western Europe firms. In this survey, we asked companies for information on recent changes in their structures and organisational designs. The St. Gallen team carried the survey responsibility for Germany, Switzerland, Austria and Italy. Over the 1997-1998 period, we furthermore carried out a series of case studies at companies which appeared to introduce new and innovative modes of organising. The St. Gallen team carried out case studies at ABB, Siemens, Hilti and Trumpf.

Some of our most interesting findings are:
- companies which pursued a comprehensive (`ganzheitliche') restructuring strategy (i.e. which were active on many fronts) on average performed better than those that did not pursue a comprehensive strategy: European companies which over the 1992-1996 period carried out organisational innovations clustered around nine restructuring variables displayed above-average performance (Whittington et al. 1999);
- multinational companies report higher levels of internal networking: there is a positive significant relationship between internationalisation and new modes of organising (working paper in progress by Ruigrok and Massini).
- the direction of change towards new modes of organising is remarkably similar across Europe (Ruigrok et al. 1999a).