Børge Obel

Return on Assets Loss from Situational and Contingency Misfits

We develop a rule-based contingency misfit model and related hypotheses to test empirically the Burton and Obel (1998) multi contingency model for strategic organizational design. The model is a set of if-then misfit rules, in which misfits lead to a loss in performance; they are complements to the strategy and organizational contingency theory fit rules. Using data from 224 small- and medium-sized Danish firms, misfits are categorized and identified. Then, performance hypotheses are developed and tested using regression models. We confirm the hypotheses that firms with situational misfits or contingency misfits, or both, incur performance losses in return on assets compared with firms with no misfits. Contrary to our hypotheses, we did not find that additional misfits lead to increased performance loss. Our results suggest that just one misfit of any kind may significantly compromise performance. These results yield a deeper understanding of organizational contingency theory, as well as implications for the rule-based fit-misfit organizational design model.

Allocative Efficiency of Technically Inefficient Production Units

We discuss how to measure allocative efficiency without presuming technical efficiency. This is relevant when it is easier to introduce reallocations than improvements of technical efficiency. We compare the approach to the traditional one of assuming technical efficiency before measuring allocative efficiency. In particular, we develop necessary and sufficient conditions on the technology to ensure consistent measures and we give dual organizational interpretations of the approaches.

Organizational Design: Coordination, control, and information systems

Introduction Once you have designed the processes and people-based systems to support your chosen organizations structure, the next step is to design coordination, control, and information systems to manage the linkages between the various parts of the organization. Along with people and processes, coordination, control, and information systems are important to assure smooth working-together among the organizational components, so that all move in a common direction toward strategic goals. Coordination, control, and information systems support integration of the organization, and they also provide monitoring and support for decision making so that managers can anticipate and react to internal and external changes that require organizational adjustment. In this chapter we consider the range of devices that managers can use to coordinate and control the organizations work. Prior to the development of computer systems, coordination and control systems were entirely manually based. Today, of course, these systems are both computer-based and manually based. Some systems are visible, in the sense that they are stated as tangible rules or can be seen in the form of reports or established routines. Others are invisible and operate in the informal ways that people think and act. These systems may even be created “on the fly,” i.e., on an as-needed basis to meet unanticipated needs. Considered together, coordination, control, and information systems constitute the infrastructure of the firm, that is, the underlying pathways for information sharing.