Designing Organizations for Dynamic Fit: System Stability, Maneuverability, and Opportunity Loss

Abstract

Fit represents a central concept for organizational design, but extant research maintains a static focus on fit, a focus that is incommensurate with the fundamentally dynamic nature of organizations and their environments. Most key organizational environments are inherently dynamic; hence, the corresponding organizational designs required for fit are necessarily dynamic too. The problem is, the dynamics of fit are not addressed well by extant theory in organization and management sciences. Alternatively, organizations can be viewed as systems of purposeful design, and designing organizations to maintain fit and respond to dynamic environments over time may be informed well by theory and practice in engineering fields where such design is well established. In this paper, we abstract to the level of airplane design, and we utilize the dynamical language and integrated system of concepts, definitions, and interrelationships from the engineering field Aerodynamics to extend organization and management sciences and address the problem of organizational design in a dynamic context. We begin with a focused summary of the literature regarding the nature of organizational fitness. We then outline a conceptual model adapted to organizational design from Aerodynamics, and we summarize the key aerodynamics concepts stability and maneuverability to inform our conceptualization in terms of both airplane and organization design. This paper enables us to articulate a set of propositions and measures that form a basis for empirical testing. This paper also reveals important, dynamic organizational design tradeoffs and implications, and it shows how such conceptualization can elucidate new insights via comparison with and extension to extant theory.