J. Strikwerda

The emergence and evolution of the multidimensional organization

The M-form, in which a corporate parent manages relatively freestanding business units, was the most successful organizational design of the twentieth century. However, contemporary economic conditions call for designs that allow firms to exploit synergies across their business units and on this dimension the M-form is notoriously weak. We report on empirical research that highlights the fundamental tension between clear lines of authority and the exploitation of synergies that firms face as they move away from the M-form and implement shared service centers, corporate account management, and matrix organizations. However, we also found that a limited but substantial number of firms in our sample evolved organizational designs that signal a new way of resolving this tension. These firms are organized around multiple dimensions (e.g. region, product, and account) and are able to simultaneously hold different managers accountable for performance on these dimensions. We discuss the nature of this multidimensional organization form by contrasting it with the M-form and the matrix organization. The multidimensional organization is best understood as the next step in the evolution from a resource centric physical production model to a customer centric knowledge exploitation model. It is a way of organizing that seems particularly well adapted to stimulating the teamwork that is necessary to create economic value in complex markets on the basis of distributed knowledge and intangible resources.

Shared Service Centers: From Cost Savings to New Ways of Value Creation and Business Administration

Abstract Purpose The reason of this chapter is to clarify at a conceptual level the phenomenon of shared service centers. The aim of the chapter is to enable managers make better decisions when applying the concept of shared service centers. Design/method/approach This is a conceptual chapter, in which the phenomenon of shared service centers is being rewritten, from an initial cost efficiency level, into a constituting building block in the new nature of the firm. Findings The findings of this chapter are that especially the combination of financial shared service centers and IT shared service centers are an instrument to organize information outside the structure of the internal organization of the firm, as implied by the changing nature of the firm. Also shared service centers are enablers for new business models, especially those based on human capital. Practical implications Executives and managers that have a better conceptual understanding of the application of shared service centers will create more benefits beyond costs savings. Originality/value This is the first chapter in which shared service center is reconceptualized in terms of the changing nature of the firm. With that it is also one of the first chapter describing the changing nature of the firm in operational terms. The value of the chapter is that it will help executives to define more efficient change processes. A second value of the chapter is that it opens new avenues of empirical and conceptual research for academia.

Strategy Execution: An integrative perspective and method for the knowledge-based economy

Within the field of business administration, in research and in the practice of business, the issue of strategy execution lacks a generally accepted paradigm. Strategy execution so far has not received the attention it should be given in view of its critical role in the performance of the firm, especially with the growth of complexity in organizations. The attention that is usually given to strategy execution in the strategy literature and especially in popular management books is, with a few exceptions, not linked to the system of management control being the function responsible for the system of strategy execution, especially through the resource allocation process. Vice versa, within the function of management control also divergent schools exists on strategy execution, and the field of management control under influence of the capital market has drifted too much away into management accounting. The paper aims to build bridges between various schools in strategy, and practice, on strategy execution. The motivation for this is that the organization of information in today’s intangible capital based firms is of more importance, as is the traditional Weberian hierarchical structure. Especially a redesigned resource allocation process with additional planning dimensions to organize information, turns out to solve the problem of integration across divisions, business units and resource departments thus solving the problems with matrix organizations, project portfolio management, end-to-end processes, etc. The paper presents a solution to the limitations of Bower’s bottom-up resource allocation process, using the system of Kaplan & Norton, but modifying their system for the need of organized complexity. This integration is achieved by taking the complexity of the modern firm as an integrative viewpoint.