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My 2012 EODF presentation

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Slides from my presentation at the EODF conference 2012 in Vevey

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My 2012 EODF presentation

  1. 1. Separation versus integration in organization designNicolay WorrenEuropean Organisation Design Forum conference, Vevey,Switzerland, May 10-11, 2012
  2. 2. The dilemma Vs.Separation Integration
  3. 3. Three arguments for separation1.2.3.
  4. 4. The governance perspective Nestlé Corporate Governance ReportSeparation of responsibilities
  5. 5. Underlying principle
  6. 6. Universal?“Let the wolf take care of the sheep”“Let the fox guard the hen house”“Let the dingo take care of the kids”“Letting the ram take care of the bag of oats”.“Giving the keys to the thief”
  7. 7. Three arguments for separation1. Avoid conflict of interest 2.3.
  8. 8. Three arguments for separation1. Avoid conflict of interest2.3.
  9. 9. Integration leads to coordination...which leads to coordination costs. Time in meetings Corporate e-mail traffic (billions of messages per year) 35 30 25 20 15 1960 10 5 0 2003 2004 2005 2006 1982
  10. 10. When there’s no role separation, everybody needs to coordinate with everybody 1 2 3 4 5 6 7 8 9 10Advisor 1 (responsible for employee survey and x x x x x x x xdivision 1) 1Advisor 2 (responsible for performance mngt x x x x x x xand division 2) 2Advisor 3 (responsible for leadership x x x x x x xdevelopment and division 3) 3Advisor 4 (responsible for competence x x x x x x x xmanagement and division 4) 4Advisor 5 (responsible for succession planning x x x x x x xand division 5) 5Advisor 6 (works on performance mngt, x x x x x x xresponsible for division 6) 6Advisor7 (works on leadership development, x x x x x x xresponsible for division 7) 7Advisor 8 (works on employee survey, x x x x x xresponsible for division 8) 8 xAdvisor 9 (works on employee survey) 9Advisor 10 (works on competence xmanagement) 10 Source: Worren (2012)
  11. 11. Three arguments for separation1. Avoid conflict of interest2. Minimize coordination cost 3.
  12. 12. Three arguments for separation1. Avoid conflict of interest2. Minimize coordination cost3.
  13. 13. Three arguments for separation1. Avoid conflict of interest2. Minimize coordination cost3.
  14. 14. Pursuing different goals in same vs different unit Q: Whats the best way to organize for innovation? Option 1 Option 2 Option 3 Functional structure Cross-functional team Structurally independent Manager Manager Manager Mfg Sales R&D Mfg Sales R&D Existing New New business business business 25% succeeded 90% succeededSource: O’Reilly, C. A. & Tushman, M. L. (2004)
  15. 15. Nestlé does it “The corporate team set up a separate unit, fully owned by Nestlé, but completely independent from the main organization”Informant in case study of innovation in Nestlé by Raisch & Tushman (2011)
  16. 16. Three arguments for separation1. Avoid conflict of interest2. Minimize coordination cost3. Avoid goal conflicts 
  17. 17. Resources Blog:Article Book www.organizationdesign.net http://www.amazon.co.uk

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