Managing the informal organisation: conceptual model

Abstract

Management thinking has seen organisations group product development activities in a number of ways in the quest to improve performance. The implementation of multi‐disciplinary teams has been recognised as a means of rapidly improving the way product development activities are managed. However, such an approach is not without its ills. Moreover, Henderson's research (Henderson, R., “Managing innovation in the information age”, Harvard Business Review, January, 1994, Reprint no. 94105) indicates that what governs product development success is the ability of the company to overcome the boundaries of any organisational grouping, rather than the type of organisation structure adopted. This research seeks to corroborate Henderson's propositions in a number of different industrial settings. Social network analysis helped embody the theory into a specification for a model to visualise and manipulate the informal organisation and the on‐going research activities further developed the specification into a working model that has been trialed in a number of different industrial settings. This paper sets the research context and presents the results thus far, both in the context of knowledge from academic research and practical application of the model. The working model has been able to manipulate the informal organisation by enabling visualisation of “core knowledge communities”, generating discussion, and supplying focus for individuals and teams to manage relationships more effectively and hence improve product development performance. Implications for further use of the model are reported, together with its potential for improving performance in organisational areas external to product development.