Small Business Economics

, Volume 39, Issue 2, pp 301–317 | Cite as

Organisation structure and innovation performance in different environments

Article

Abstract

This paper examines the relationship between organisation structure and innovation performance in a large sample of UK small and medium-sized enterprises. It asks whether there is an optimal structure and whether this differs between different firm environments and between young and older firms. We find that the influences on the ability to innovate differ from those on the commercialisation of innovations. We show that decentralised decision-making, supported by a formal structure and written plans, supports the ability to innovate in most circumstances and is superior to other structures. We also find some evidence that young firms operating in high technology sectors with informal structures have a greater tendency to be innovative. In addition, we find very few differences between young and older firms in terms of their optimal structures in low technology sectors.

Keywords

Formality Organisation structure Management practices Innovation Small and medium-sized enterprises 

JEL Classifications

L22 L25 L26 M21 M52 

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Copyright information

© Springer Science+Business Media, LLC. 2010

Authors and Affiliations

  1. 1.Centre for Business Research, Queens’ CollegeUniversity of CambridgeCambridgeUK
  2. 2.Queen Elizabeth HouseUniversity of OxfordOxfordUK
  3. 3.Centre for Business Research, Judge Business SchoolUniversity of CambridgeCambridgeUK

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