OUT WITH THE OLD AND IN WITH THE NEW? THE RELATIONSHIP BETWEEN TRADITIONAL AND NEW ORGANIZATIONAL PRACTICES

Abstract

A burgeoning literature refers to the effect of hypercompetitive conditions on organizations. The new orthodoxy involves reference to the disintegration of vertical, rational bureaucracies and the corresponding emergence of widespread innovation in new organizational practices such as delayering, outsourcing, and reducing organizational boundaries. Differing assumptions occur regarding the compatibility of new organizational practices with more traditional practices such as centralization and formalization. We present systematic, survey‐based data in order to assist in assessing these differing assumptions about compatibility. Our results confirm greater use of new organizational practices by organizations operating in dynamic environments. They also show that greater use of new organizational practices is not associated with less use of either centralization or formalization—indeed it is associated with an increased use of formalization. We argue the need to move beyond a compatibility/incompatibility dichotomy and propose a research agenda for achieving this. The implications for management include the need to view with caution evangelical calls for radical restructuring that ignore the subtleties of the relationship between traditional and new organizational practices.

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