Structural Approaches to Organizing for Radical Innovation in Established Firms

Abstract

Management research has consolidated around the idea that organic structures (typically found in start-ups and young firms) are better at generating novel ideas and products, while mechanistic ones (typically found in established companies) are better at generating incremental improvements. Therefore, the usual recommendation to established firms with the goal of producing radical innovations is to develop them outside the firm itself. This paper questions this ‘standard solution’ and discusses alternative organizational approaches to producing radical innovation that avoid extreme forms of separation and relate to critical contextual issues. The paper ends with a discussion of implications for managers.