Selective Intervention and Internal Hybrids

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Selective Intervention and Internal Hybrids

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dc.contributor.author Foss, Nicolai J.
dc.date.accessioned 2009-08-20
dc.date.accessioned 2009-08-20T11:55:44Z
dc.date.available 2009-08-20T11:55:44Z
dc.date.issued 2009-08-20
dc.identifier.isbn 8778731151
dc.identifier.uri http://hdl.handle.net/10398/7894
dc.description.abstract Infusing hierarchies with elements of market control has become a much-used way of simultaneously increasing entrepreneurialism and motivation in firms. However, this paper argues that such “internal hybrids,” particularly in their radical forms, are inherently hard to successfully design and implement, because of fundamental credibility problems related to managerial promises to not intervene in delegated decision-making ¾ an incentive problem that is often referred to as the “problem of selective intervention.” This theoretical theme is developed and illustrated, using the case of the world-leading Danish hearing aids producer, Oticon. In the beginning of the 1990s, Oticon became famous for its radical internal hybrid, the ”spaghetti organization.” Recent work has interpreted the spaghetti organization as a radical attempt to foster dynamic capabilities by imposing loose coupling on the organization, neglecting, however, that about a decade later, the spaghetti organization has given way to a more traditional matrix organization. This paper presents an organizational economics interpretation of organizational changes in Oticon, and argues that a strong liability of the spaghetti organization was the above incentive problem. Motivation in Oticon was strongly harmed by selective intervention on the part of top-management Changing the organizational structure was one means of repairing these motivational problems. Refutable implications are developed, both for the understanding of efficient design of internal hybrids, and for the more general issue of the distinction between firms and markets, as well as the choice between internal and external hybrids. en_US
dc.format.extent 48 s. en_US
dc.language eng en_US
dc.publisher DRUID en_US
dc.relation.ispartofseries DRUID Working Paper;01-16
dc.title Selective Intervention and Internal Hybrids en_US
dc.type wp en_US
dc.accessionstatus modt09aug20 liga en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Danish Research Unit for Industrial Dynamics en_US
dc.contributor.departmentshort DRUID en_US
dc.contributor.departmentuk Danish Research Unit for Industrial Dynamics en_US
dc.contributor.departmentukshort DRUID en_US
dc.idnumber 8778731151 en_US
dc.publisher.city Frederiksberg en_US
dc.publisher.year 2001 en_US
dc.title.subtitle Interpreting and Learning from the Rise and Decline of the Oticon Spaghetti Organization en_US


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