Organizing for innovation: Loose or tight control?

As organizations operate in an uncertain world, errors are unavoidable. Thi s article analyses two types of organizational error based upon a distincti on between clear and fuzzy structures. Clear structures are based upon prec ise rules which enable a clear definition of decision types and the procedu res for making those decisions. Fuzzy structures are based upon flexible ru les by which decision making becomes a "muddling through" process. Errors o f tightness occur when structures are too tight for their technical and Str ategic contexts; this means that decision making tends to be too constraine d by procedures, hierarchical rules and other paraphernalia of bureaucracy. Errors of looseness occur when structures are too fuzzy for their contexts ; this means that decisions could be more efficiently made by a more system atic use of procedures and rules. This article reports results from a study of the implementation of new technology in a group of twenty polymer proce ssing companies in the UK. Overall, the companies, as reported by the chief executives, saw themselves as somewhat too crisp in their decision making. When the relationship between organizational errors and effectiveness was examined, no clear cut pattern emerged for either of the two measures of ef fectiveness employed. The measures of effectiveness are comparative perform ance and awareness of other firms in the field. However, if the contextual factors of strategic mix and technological objectives were considered, a pa ttern did emerge. When the companies were divided into three groups accordi ng to the mix of strategies and technological objectives used, both tightne ss and the measures of effectiveness varied systematically. Strategy was as sessed by means of a modified form of Miles and Snow's (1978) typology whic h defines a "prospector strategy" as a strategy involving continuous innova tion. In contrast a "defender strategy" emphasises price competition and op erating efficiency. The most effective companies were those which had a mix of prospecting and defending strategies and which recorded most errors of "tightness". (C) 1998 Elsevier Science Ltd. All rights reserved.