Open organizational structures: A new framework for the energy industry

Abstract

Innovation and organizational design is central to how organizations manage their structures and boundaries for greater engagement to an increasing number of users as potential partners for increased value creation. Open organizing is prominent in industries where the locus of innovation can be extended to users leading to a burgeoning literature on concepts like co-creation, open innovation, and collaborative efforts. However, the current body of scholarship offers little insight into how organizations establish open organizational structures, specifically in more traditional industries like the energy industry, calling for a renewed focus on organizational structures and boundaries that is not merely related to reducing transactional costs or gaining efficiency. For the energy industry, open organizing remains paradoxical as it is not entirely driven by low communication cost and increased virtual connectivity. The energy industry is localized, performing under a broader industry framework subjective to a list of exogenous and endogenous factors. This study synthesizes the cases of 8 energy companies to produce a theoretical framework building on a checklist of the exogenous and endogenous factors that are central to the innovation process. Most importantly, this study reconciles the work on organizational boundaries and open structures to produce such theoretical framework. This framework can act as an evaluation tool for energy companies to assess the transition between existing structures to an open structure.