Change and complementarities in the new competitive landscape: A European panel study, 1992-1996

This paper addresses three weaknesses in the literature on new organization al forms: the limited mapping of the extent of contemporary organizational change; confusion about how contemporary changes link together; and the lac k of systematic testing of the performance consequences of this kind of cha nge. Drawing on a large-scale survey of organizational innovation in Europe an firms, the paper finds widespread but not revolutionary change in terms of organization structure, processes, and boundaries. Using the economics n otion of complementarities; the paper develops contingency and configuratio nal approaches to suggest that organizational innovations will tend to clus ter in particular ways and that the performance benefits of these innovatio ns depend on their clustering. Complementarities in performance are explore d from both inductive and deductive perspectives. Consistent with the expec tations of complementarity theory, high-performing firms appeared to be inn ovating more and differently than low-performing firms. Again consistent wi th complementarities, piecemeal changes-with the exception of IT-were found to deliver little performance benefit, while exploitation of the full set of innovations was associated with high performance. Though few European fi rms were found to exploit the complementarities of new organizational pract ices, those that did enjoyed high-performance premia.