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The Importance of Organizational Structure for the Adoption of Innovations

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Author Info

  • Stephen J. DeCanio

    ()
    (Department of Economics, University of California, Santa Barbara, California 93106)

  • Catherine Dibble

    ()
    (Department of Geography, University of California, Santa Barbara, California 93106)

  • Keyvan Amir-Atefi

    ()
    (Department of Economics, University of California, Santa Barbara, California 93106)

Abstract

Organizational structure affects both the overall behavior of firms and the situations of individuals and subunits within firms. The effect of exogenous changes in the environment (market prices, costs, or regulations) on organizations can be partitioned into the immediate direct effect of the change and the full effect after organizational structure has had time to adjust. This paper develops a computational model of the diffusion of a profitable innovation through a firm, and uses numerical simulations to calculate the relative importance of the direct and structural adjustment components of changes in profitability. One finding is that a failure to recognize the importance of organizational structure on the performance of firms will lead to serious bias in estimation of the costs or benefits of a change in external circumstances. The type of network model developed also has implications for the individuals and divisions that make up the firm. We examine some of the structural characteristics of well-adapted organizations, and show that asymmetries and economic inequalities emerge even when the individual agents' personal characteristics are identical.

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File URL: http://dx.doi.org/10.1287/mnsc.46.10.1285.12270
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Bibliographic Info

Article provided by INFORMS in its journal Management Science.

Volume (Year): 46 (2000)
Issue (Month): 10 (October)
Pages: 1285-1299

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Handle: RePEc:inm:ormnsc:v:46:y:2000:i:10:p:1285-1299

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Keywords: organizational theory; innovation; inequality; structural change; algorithmic computation;

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Cited by:
  1. Donna Ramirez Harrington, 2013. "Effectiveness Of State Pollution Prevention Programs And Policies," Contemporary Economic Policy, Western Economic Association International, vol. 31(2), pages 255-278, 04.
  2. Barry Anderson & Jörg Leib & Ralf Martin & Marty McGuigan & Mirabelle Muuls & Laure de Preux & Ulrich J. Wagner, 2011. "Climate change policy and business in Europe: evidence from interviewing managers," LSE Research Online Documents on Economics 47493, London School of Economics and Political Science, LSE Library.
  3. Ralf Martin & Mirabelle Muûls & Ulrich J. Wagner & Laure B. de Preux, 2010. "Anatomy of a Paradox: Management Practices, Organisational Structure and Energy Efficiency," CEP Discussion Papers dp1039, Centre for Economic Performance, LSE.
  4. Harrington, Donna Ramirez, 2012. "Two-stage adoption of different types of pollution prevention (P2) activities," Resource and Energy Economics, Elsevier, vol. 34(3), pages 349-373.
  5. Myong-Hun Chang & Joseph E Harrington Jr, 2004. "Agent-Based Models of Organizations," Economics Working Paper Archive 515, The Johns Hopkins University,Department of Economics.
  6. Barr, Jason & Saraceno, Francesco, 2002. "A computational theory of the firm," Journal of Economic Behavior & Organization, Elsevier, vol. 49(3), pages 345-361, November.
  7. Inoue, Emiko & Arimura, Toshi H. & Nakano, Makiko, 2013. "A new insight into environmental innovation: Does the maturity of environmental management systems matter?," Ecological Economics, Elsevier, vol. 94(C), pages 156-163.
  8. Pismennaya, Anna & Dosorova, Helen & Anfinogentov, Vasiliy, 1999. "Development of Market Relations in Russia: The Impact of the Structure of a Firm," ERSA conference papers ersa99pa216, European Regional Science Association.
  9. Masurel, E. & Nijkamp, P., 2009. "Bridging the gap between institutions of higher education and small and medium-size enterprises," Serie Research Memoranda 0037, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  10. Madhu Khanna & George Deltas & Donna Harrington, 2009. "Adoption of Pollution Prevention Techniques: The Role of Management Systems and Regulatory Pressures," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 44(1), pages 85-106, September.
  11. Masurel, Enno, 2005. "Use of Patent Information : Empirical Evidence from Innovative SMEs," Serie Research Memoranda 0002, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.

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