The effect of virtuality on the functioning of centralized versus decentralized structures—an information processing perspective

  • Kent Wickstrøm Jensen
  • Dorthe Døjbak Håkonsson
  • Richard M. Burton
  • Børge Obel
Article

Abstract

Does virtuality in organizations require centralization or decentralization? We specify the coordination and information processing requirements for virtual organizing in order to examine how these requirements are met by centralized and decentralized structural designs, respectively. We use the agent based SimVision computational discrete event simulation model as our experimental platform to develop concise and comparable measures of the information processing needs of virtual organizing, and how these are met by the information processing capabilities of the centralized and decentralized structures. Contrary to conventional wisdom, that the centralized form is more effective in virtual settings than the decentralized form.

Keywords

Virtual organization Centralization Information processing Organizational design Virtuality 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Ahuja MJ, Carley KM (1999) Network structure in virtual organizations. Organ Sci 10(6):741–757 CrossRefGoogle Scholar
  2. Alberts DS, Hayes RE (2003) Power to the edge. CCRP, Washington Google Scholar
  3. Alberts DS, Hayes RE (2006) Understanding command and control. CCRP, Washington Google Scholar
  4. Armstrong DJ, Cole P (2002) Managing distances and differences in geographically distributed work groups. In: Hinds P, Kiesler SB (eds) Distributed work. MIT Press, Cambridge Google Scholar
  5. Arrow KJ (1974) The limits of organization. Norton, New York Google Scholar
  6. Brewer MB (1996) In-group favoritism: the subtle side of intergroup discrimination. In: Messick DM, Tenbrunsel A (eds) Codes of conduct: behavioral research and business ethics. Russell Sage Found, New York, pp 160–171 Google Scholar
  7. Burns T, Stalker GM (1961) The management of innovation. Tavistok, London Google Scholar
  8. Burton RM (2003) Computational laboratories for organization science: questions, validity and docking. Comput Math Organ Theory 9(2):91–108 CrossRefGoogle Scholar
  9. Burton RM, Obel B (1995) The validity of computational models in organization science: from model realism to purpose of the model. Comput Math Organ Theory 1(1):57–71 CrossRefGoogle Scholar
  10. Burton RM, Obel B (2004) Strategic organizational diagnosis and design—the dynamics of fit. Kluwer Academic, Dordrecht Google Scholar
  11. Burton RM, DeSanctis G, Obel B (2006) Organizational design: a step-by-step approach. Cambridge University Press, Cambridge Google Scholar
  12. Carroll T, Burton RM (2000) Organizations and complexity: searching for the edge of chaos. Comput Math Organ Theory 6:319–337 CrossRefGoogle Scholar
  13. Chesbrough H, Kusunoki K (2001) The modularity trap: innovation, technology phases shifts and the resulting limits of virtual organizations. In: Nonaka I, Teece D (eds) Managing industrial knowledge. Sage, London, pp 202–230 Google Scholar
  14. Chesbrough HW, Teece DJ (1996) When is virtual virtuous? Harv Bus Rev 65–73 Google Scholar
  15. Cohen WM, Levinthal DA (1990) Absorptive capacity: a new perspective on learning organizations. Organ Sci 7:119–135 Google Scholar
  16. Cramton CD (2001) The mutual knowledge problem and its consequences for dispersed collaboration. Organ Sci 12(3): 346–371 CrossRefGoogle Scholar
  17. Daft RL, Lengel RH, Trevino LK (1987) Message equivocality, media selection and manager performance: implications for information systems. MIS Q 11:355–366 CrossRefGoogle Scholar
  18. Davis JP, Bingham CB, Eisenhardt KM (2007) Developing theory through simulation methods. Acad Manag J Google Scholar
  19. Davis SM, Lawrence PR (1977) Matrix. Addison-Wesley, Reading Google Scholar
  20. Dennis AR, Fuller RM, Valacich J (2008) Media, tasks and communication processes: a theory of media synchronicity. MIS Q 32(3):575–600 Google Scholar
  21. DeSanctis G, Monge P (1999) Introduction to the special issue: communication processes for virtual organizations. Organ Sci 10(6):693–703 CrossRefGoogle Scholar
  22. Galbraith JR (1974) Organization design: an information processing view. Interfaces 4(3) Google Scholar
  23. Galbraith JR (1977) Organization design. Addison-Wesley, Reading Google Scholar
  24. Grinter R, Herbsleb J, Perry D (1999) The geography of coordination: dealing with distance in R&D work. In: Proceedings of GROUP’99. ACM Press, New York Google Scholar
  25. Guetzkow H, Simon H (1955) The impact of certain communication nets upon organization and performance in task-oriented groups. Manag Sci 1:233–250 CrossRefGoogle Scholar
  26. Hamblin H (1995) Employees’ perspectives on one dimension of labour flexibility: working at a distance. Work Employ Soc 9(3):473–498 Google Scholar
  27. Harrison JR, Lin Z, Carroll GR, Carley KM (2007) Simulation modeling in organizational and management research. Acad Manag J Google Scholar
  28. Herbsleb J, Mockus A, Finholt T, Grinter R (2000) Distance, dependencies, and delay in a global collaboration. In: Proceedings of CSCW 2000. ACM Press, New York Google Scholar
  29. Hinds PJ, McGrath C (2006) Structures that work: structure and coordinated ease in geographically distributed teams. Group Organ Interfaces 343–352 Google Scholar
  30. Hinds PJ, Mortensen M (2005) Understanding conflict in geographically distributed teams: the moderating effects of shared identity, shared context, and spontaneous communication. Organ Sci 16(3):290–307 CrossRefGoogle Scholar
  31. Horii T, Jin Y, Levitt RE (2005) Modelling and analyzing cultural influences on project team performance. Comput Math Organ Theory 10:305–321 CrossRefGoogle Scholar
  32. Jehn KA (1997) A qualitative analysis of conflict types and dimensions in organizational groups. Adm Sci Q 42(3):530–557 CrossRefGoogle Scholar
  33. Jensen KW, Haakonsson DD, Burton RM, Obel B (2009) Embedding virtuality into organization design theory: virtuality and its information processing consequences. In: Bøllingtoft A, Håkonsson DD, Nielsen JF, Snow CC, Ulhøi J (eds) New approaches to designing and organizing. Springer, Boston Google Scholar
  34. Jin Y, Levitt RE (1996) The virtual design team: a computational model of project organizations. Comput Math Organ Theory 2(3):171–196 CrossRefGoogle Scholar
  35. Kim J, Burton RM (2002) The effect of task uncertainty and decentralization on project team performance. Comput Math Organ Theory 8(4):365–384 CrossRefGoogle Scholar
  36. Kirkman BL, Mathieu JE (2005) The dimensions and antecedents of team virtuality. J Manag 31(5):700–718 CrossRefGoogle Scholar
  37. Kramer R (1999) Trust and distrust in organizations: emerging perspectives, enduring questions. Ann Rev Psychol 50:569–598 CrossRefGoogle Scholar
  38. Kraut RE, Fussell SR, Brennan SE, Siegel J (2002) Understanding effects of proximity on collaboration: implications for technologies to support remote collaborative work. In: Hinds P, Kiesler S (eds) Distributed work. MIT Press, Cambridge, pp 137–162 Google Scholar
  39. Kumar J (2006) Working as a designer in a global team. Interactions 25–27 Google Scholar
  40. Kurland NB, Egan TD (1999) Telecommuting: justice and control in the virtual organization. Organ Sci 10(4):500–513 CrossRefGoogle Scholar
  41. Levitt RE (1999) The VitéProject handbook: a users guide to modeling and analyzing project work processes and organizations. Manual to VitéProject tm 2.2. Vité Corp Google Scholar
  42. Levitt RE (2004) Computational modeling of organizations comes of age. J Comput Math Organ Theory 10(2):127–145 CrossRefGoogle Scholar
  43. Levitt RE, Cohen GP, Kunz JC, Nass CI, Christiansen TR, Yin J (1994) The virtual design team: simulating how organization structure and information processing tools affect team performance. In: Carley KM, Prietula M (eds) Computational and mathematical organization theory. Lawrence Erlbaum, Hillsdale Google Scholar
  44. Levitt RE, Thomson J, Christiansen TR, Kunz JC, Yin J, Nass CI (1999) Simulating project work processes and organizations: towards a micro-contingency theory of organizational design. Manag Sci 45(11):1479–1495 CrossRefGoogle Scholar
  45. Lipnick J, Stamps J (1997) Virtual teams: researching across space, time and organizations with technology. Wiley, New York Google Scholar
  46. Liu X, Magjuka R, Lee S (2008) The effects of cognitive thinking styles, trust, conflict management on online students’ learning and virtual team performance. Br J Educ Technol 39(5):829–846 CrossRefGoogle Scholar
  47. March JG, Simon HA (1958) Organizations. Wiley, New York Google Scholar
  48. Malone TW, Crowston K (1994) The interdisciplinary study of coordination. ACM Comput Surv 26(1):87–120 CrossRefGoogle Scholar
  49. Martins LL, Gilson LL, Maynard TM (2004) Virtual teams: what do we know and where do we go from here? J Manag 30(6):805–835 CrossRefGoogle Scholar
  50. McCann J, Galbraith JR (1981) Interdepartmental relations. In: Nystrom P, Starbuck W (eds) Handbook of organizations, vol 2. Oxford University Press, New York, pp 60–84 Google Scholar
  51. Mintzberg H (1979) The structuring of organizations. Prentice Hall, Engelwood Cliffs Google Scholar
  52. Mowshowitz A (1997) Virtual organization. Commun ACM 40(9):30–37 CrossRefGoogle Scholar
  53. Mulders DEM, Romme AGL (2009) Unpacking dynamic capability: a design perspective. In: Bøllingtoft A, Håkonsson DD, Nielsen JF, Snow CC, Ulhøi J (eds) New approaches to designing and organizing. Springer, Boston Google Scholar
  54. Nissen ME (2007) Computational experimentation on new organizational forms: exploring behavior and performance of edge organizations. Comput Math Organ Theory 13(3):203–240 CrossRefGoogle Scholar
  55. Nohria N, Eccles RG (1992) Face-to-face: making network organizations work. In: Nohria N, Eccles RG (eds) Networks and organizations. Harvard Business School Press, Boston, pp 288–308 Google Scholar
  56. Olson MH (1982) New information technology and organizational culture. Manag Inf Syst Q 71–92. Special Issue (December) Google Scholar
  57. O’Leary MB, Cummings JN (2007) The spatial, temporal, and configurational characteristics of geographical dispersion in teams. MIS Q 31(3):433–452 Google Scholar
  58. Reagans R, McEvily B (2003) Network structure and knowledge transfer: the effects of cohesion and range. Adm Sci Q 48(2):240–267 CrossRefGoogle Scholar
  59. Rogers E, Bhowmik D (1970) Homophily-heterophily: relational concepts for communication research. Public Opin Q 34:523–538 CrossRefGoogle Scholar
  60. Siggelkow N, Rivkin JE (2005) Speed and search: designing organizations for turbulence and complexity. Organ Sci 16:101–122 CrossRefGoogle Scholar
  61. Simon HA (1991) Bounded rationality and organizational learning. Organ Sci 2(1):125–134 CrossRefGoogle Scholar
  62. Sundstrom E, De Meuse KP, Furtrell D (1990) Work teams: applications and effectiveness. Am Psychol 45(2):120–133 CrossRefGoogle Scholar
  63. Teece DJ (2007) Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strateg Manag J 28(13):1319–1350 CrossRefGoogle Scholar
  64. Thompson JD (1967) Organizations in action. McGraw-Hill, New York Google Scholar
  65. Tushman M (1979) Work characteristics and submit communication structure: a contingency analysis. Adm Sci Q 24:82–97 CrossRefGoogle Scholar
  66. Tushman ML, Nadler D (1978) Information processing as an integrating concept in organizational design. Acad Manag Rev 3:613–624 CrossRefGoogle Scholar
  67. Wong SS, Burton RM (2002) Virtual teams: what are their characteristics and impact on team performance? Comput Math Organ Theory 6:339–360 Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  • Kent Wickstrøm Jensen
    • 1
  • Dorthe Døjbak Håkonsson
    • 2
  • Richard M. Burton
    • 3
  • Børge Obel
    • 4
  1. 1.Department of Entrepreneurship and Relationship ManagementUniversity of Southern DenmarkKoldingDenmark
  2. 2.Department of Management, Aarhus School of BusinessAarhus UniversityAarhus VDenmark
  3. 3.The Fuqua School of BusinessDuke UniversityDurhamUSA
  4. 4.Aarhus School of BusinessAarhus UniversityAarhus VDenmark

Personalised recommendations