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Modeling the Effect of Rigidity in Organizational Structure on Organizational Self-Renewal and Knowledge Diffusion: A Theoretical Framework

Author

Listed:
  • Avimanyu Datta

    (Independent Researcher)

  • Sukumar RayChaudhuri

    (Burdwan University)

Abstract

Combining and Extending the concepts of fluid viscosity, system dynamics and Cobb-Douglas production function, an attempt was made to propose a theoretical framework that models the effect of organizational structure on organizational self-renewal and knowledge diffusion. It was showed that rigidity in organizational structure creates an organizational viscosity (due to vertical layers of management) and conflict of interest (between functional divisions), that affects both the self- renewal exercise and Knowledge Diffusion, which are the two most integral aspects of staying competitive in volatile business environment. It was illustrated that with the increase in the rigidity of the organizational structure causes decrease in its self-renewal exercise and diffusion of knowledge. Ironically, the model also shows that absence of any structure also has a negative impact on organizational self-renewal and knowledge diffusion. Based on its self- renewal capability organizations are categorized here, as innovators, adapters (both early and late), laggards and virtual innovators. The model explained, graphically, how knowledge diffusion decreases the time to innovate.

Suggested Citation

  • Avimanyu Datta & Sukumar RayChaudhuri, 2005. "Modeling the Effect of Rigidity in Organizational Structure on Organizational Self-Renewal and Knowledge Diffusion: A Theoretical Framework," GE, Growth, Math methods 0510001, EconWPA.
  • Handle: RePEc:wpa:wuwpge:0510001
    Note: Type of Document - pdf; pages: 30
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    File URL: http://econwpa.repec.org/eps/ge/papers/0510/0510001.pdf
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    References listed on IDEAS

    as
    1. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
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    Keywords

    Knowledge Carriers (KC); Organizational Viscosity; Damping Ratio; Organization Self-Renewal; Steady State; Knowledge Diffusion; fluid viscosity; system dynamics and Cobb-Douglas production function.;

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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