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Long Range Planning

36/5 October 2003



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Charles Baden-Fuller Editorial

The Rhythm of Management: Structures and Structuring
Karl Weick often said that managing was important because structures are only a part of the story of what firms can do. The title of this issue, "The Rhythm of Management" reflects the duality of our work: we deal with both structures and structuring. Structures are important but they have to be adjusted to the pressures and opportunities that organisations face in such a way that they create a natural rhythm of change and do not collapse. So it is with pleasure that I introduce this issue on structures and structuring.

In the first piece, Michael Goold and Andrew Campbell show how large multinational firms are rising to the challenge of managing complexity. They examine the structures they use and how these change. A key dimension of structure is role definition, and they explore the dynamics of getting just enough but not too much structure. Their article also gives insight into how the very large lumbering giants get the right rhythm to survive in the current world of small, focused and nimble players.

Kathry Pavlovich shows that getting the dynamics right makes for the success of world famous Waitomo Caves tourist site. She explores the structures and the processes of this New Zealand success story. Just as role definition is important in the large complex firm, so it is also important here in the small but complex network of interacting agencies. She also shows how the successful dynamics of role change can be better understood using the Jazz metaphor.

The dynamics of networks is the subject of the third piece on media firms in London. Lilach Nachum and David Keeble tell that the London-Soho media firms are simultaneously local and global, and they point to the dynamics of role choice in making these firms so vibrant.

Our final piece by Bryan Husted looks at social responsibility with a structural lens. Using a very classical analysis based on the theory of the firm, he examines the costs and benefits of in-house versus out-sourcing this important activity.

Amy Swann
All authors and reviewers of LRP know that Amy Swann, our administrative assistant, has been the central pivot of LRP over the last two and a half years. Hidden from the reader, she has dedicated her work to making life smooth and easy for those involved in the journal. Amy has decided to leave London and move to York. So on behalf of us all, I thank her for her work and wish her luck in her future.


Executive Summaries

Michael Goold and Andrew Campbell Structured Networks: Towards the Well Designed Matrix michael.goold@ashridge.org.uk

Matrix structures have been adopted by many companies to cope with the market and competitive conditions they face. Unfortunately, these matrix structures have too often fallen into disrepute. Managers have found them difficult to work in, burdened with excessive centralisation and ambiguous reporting structures. Many managers prefer the clear focus of structures based on autonomous, self-contained business units. But the need for interdependent co-operation between different units remains, and this article puts forward the concept of a “structured network” as a means of overcoming the problems typically associated with traditional matrix organisations.
In structured networks, the default position is decentralisation—the organisation is largely self-managing, but has sufficient structure, process and hierarchy to achieve coordination and to implement corporate strategy. The objective is to obtain the benefits of interdependence that are designed into a typical matrix, but without sacrificing clear responsibilities, managerial initiative and accountability, speed of decision-making and lean hierarchy. A well-designed structured network will achieve clarity about each unit’s role, and promote mutual learning, cooperation and shared responsibility without compromising
distinctive differences, specialist unit cultures and unit accountability. The article offers a taxonomy of eight unit types, defining the broad responsibilities, lateral relationships and level of autonomy in decision-making of each, as a basis for designing structured networks, organisations with just enough, but not too much structure.

Kathryn Pavlovich All That Jazz kpav@waikato.ac.nz

This article examines the organising patterns of a multi-centred network, which has no single firm assuming overall leadership. The case study is centred on the Waitomo Caves, set in an isolated rural village in limestone karst landscape in New Zealand, where the main tourism attraction offers unique fauna - glow-worms which twinkle like stars in the night.
The author shows how a network has grown up around this central player which includes caving activities, above- and below-ground ecological management agencies and ancillary providers of food, accommodation etc.
The article uses the metaphor of jazz throughout to illustrate how interdependent collective action plays an important role in organising network activities, and describes how collective action groups are configured and how the structural configuration influences the complementary and reciprocal information transfers needed to create tacit knowledge. It likens the organisation of this kind of hydra, multi-headed network to the process of improvisation in jazz, giving an insight into the seemingly unplanned activities that characterise the networked economy. The author shows how the network can be ‘in the groove’ through a portfolio of interconnected ties, and how this structural optimisation leads to the development of value chain capabilities that contribute to the enrichment of strategic networked communities.

Lilach Nachum and David Keeble Neo-Marshallian Clusters and Global Networks: The Linkages of Media Firms in Central London Lilach_Nachum@baruch.cuny.edu

The Soho district of Central London, meeting ground of artists, writers and poets has been the heart of the country’s cultural life for more than a century. The presence of this group of creative individuals led to establishment of film companies and advertising offices in the area, and it is now the centre of the media industry in the UK. This paper examines the nature of the external linkages of firms in this media cluster, and draws implications for the competitive advantages that firms in clusters develop. The analysis shows that these firms
are strongly embedded in the local cluster and rely heavily on resources and processes available locally—especially the skilled and experienced free-lance work-force as well as suppliers and customers, and the informal free flow of ideas and learning available within the cluster’s bars and coffee-shops. At the same time, they also maintain linkages extending well beyond the local cluster and the national scale into the key media centres worldwide,
especially in Hollywood. The paper argues that, despite the advantages of the local cluster, for firms to compete successfully, they must achieve a successful balance of linkages between localised sources of interaction and those residing at the global scale.

Bryan W. Husted Governance Choices for Corporate Social Responsibility: to Contribute, Collaborate or Internalize? bhusted@itesm.mx

In today’s competitive business environment, Corporate Social Responsibility activities are less and less likely to be simply altruistic. But to maximise their contribution to the donor firm’s bottom line, not only is the choice of what causes to support, but also the choice of how this support is organised, become strategic matters for senior management. This article identifies three basic options for the governance of CSR activities: the contribution – where firms simply donate to an external usually non-governmental or non-profit agency; the internalisation option, where the firm sets up a wholly internal arm to give effect to its charitable impulses; and the collaboration, seen as a half-way house between the two, where a firm contributes to an external ‘expert’, but joins it in managing the way benefit is derived from its funding.
The author analyses the problems of co-ordination and motivation of CSR, capturing them with the concepts of centrality and specificity. Looking at appropriate governance choices and how they fit with firm expertise, and how best firms may capture value from this activity, it judges that the more closely related the charitable activity is to the firm’s core mission, and the more specific the benefits are, the more the firm has to gain from internalising or at least collaborating in CSR provision. Giving plenty of examples, and also analysing costs for each governance style, the article also provides a decision-making tool to guide senior management in maximizing the benefits they can reap from their CSR activities.

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