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