Organization Design for Sustainability

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Discussion

Dirk Sampselle:

"Andrew Griffiths and Joseph A. Petrick’s work on organizational design for sustainable enterprises identifies three ways in which traditional large corporation hierarchical architectures impede sustainability competitiveness. (Andrew Griffiths and Joseph A. Petrick, Corporate architectures for sustainability, International Journal of Operations & Production Management, Vol. 21 No. 12 (2001) 1573-1585.)

First, established task routines promote the status quo and result in “dynamic conservatism.” New practices and theories of the firm’s value to society are perceived as threats when firms rely heavily on routines and command-and-control style management systems.

Second, the authors find that command-and-control, hierarchical architectures deny access to stakeholder input. The traditional organizational design focuses only on a very limited set of stakeholders: the board of directors and stockholders. Perceivably, the lack of stakeholder integration inhibits effective values formulation, reduces scanning, and precludes opportunities for innovation.

Finally, Griffiths and Petrick say that no department in the traditional corporate architecture has “specialized environmentally relevant knowledge to recognize, act on, and transfer to other parts of the organization.” However, it is not one department that must possess specialized knowledge, but rather a collaborative group from across the organization that must assimilate and develop action plans based on the knowledge to capitalize on opportunities.

In tune with that observation, the Griffiths and Petrick study shows that power should be devolved to individuals and local communities to create citizen-inspired agenda for local sustainability; and that firms should play an active role in creating communities where production and use align with community needs. Unilever’s local supply chain and distribution efforts (see free discussion her mark ready examples of a leading firm’s implementation of these practices. The Griffiths and Petrick study also shows that smaller structures were more responsive to concerns.

Griffiths and Petrick identify three alternative organizational architectures which may be able to mitigate size effects, and provide alternative routes to responsiveness. The first alternative architecture is “network” organizational design. The second is “virtual” organizational design. The third is “communities of practice.”

Network organizations are defined by dispersed service nodes, and small, flexible, responsive, and innovative units even when overall organization size grows. Network organizations are able to respond to changing market conditions with the speedy development of products and services. However, they are reliant upon free-flowing information, adequate communication fora, and employees that are appropriately skilled and motivated.

Virtual organizations leave a minimal environmental footprint, can give the impressions and benefits of size, and can operate globally with a small number of employees. Land’s End mail-order catalogue and Amazon.com are ready examples. The information technology of virtual organizations allows extensive outsourcing, but this creates an imperative for the virtual organizations to remain responsible for the impacts of their suppliers and distributors.

The authors define “communities of practice” as amorphous, nonhierarchal structures that form around areas of interest and expertise. Status in the communities is based on expertise and contribution to the development of leading ideas, rather than position or authority. The communities are effective because they are able to take on new members, acquire new information, and remain focused on common interest and the desire for learning.

Virtual organization design principles are best exemplified by the “values jams” led by IBM.

Network organization design is exemplified by the localized supply chain and distribution initiatives implemented by Unilever: despite enormous size, Unilever was able to develop feedback from stakeholder communities, internalize that feedback into its emerging markets strategy, and then implement pocketed local suppliers and distribution channels that served local needs. IBM’s organic outreach efforts at CARE and other ngos are also stellar examples of using networks to discover market opportunities.

Finally, Herman Miller’s implementation of cradle-to-cradle design principles through their DfE process is emblematic of the Communities of Practice organization design: Herman Miller leveraged organic committees of engineers and chemical analysts to determine the ideal chemical makeup of product components, and then leveraged the findings of those communities to develop its overall environmental strategy." (http://www.quora.com/Sustainability/What-organization-design-principles-promote-sustainable-practices)