The Emergence of New Organization Design from the Self-Managed Team-Based Organizations

To survive in global markets, answering to actual customers’ requests, high quality and low cost have become the main objectives in new product development environment. To achieve these objectives more and more firms embraced the conversion to a post-bureaucratic structure, transforming them from a hierarchically based organization to a flatter organization of self-managed teams. In such a new context, companies have to cope with the coordination issues since they need to secure that teams and people collaborate effectively with other teams as well as within their own team. Self-managed team-based organizations look like biological super-organisms, a mass of individual entities that exist together, cooperate, and evolve together via an intricate set of symbiotic and reciprocal relationships forming a larger organism. The open and peer-based nature of self-managed teams makes the traditional logics of control, hierarchy, formal roles, and pecuniary incentives considerably outdated. In team -based organizations, formal authority exercised by managers is substituted by informal control enacted by peers inside the teams, and by informal authority based on expertise, reputation, status, gatekeeping privileges or control over crucial resources or technology. Thus, the basis of organization’s ability to drive people and teams is not just formal authority but also the bargaining power that different organizational entities may exercise over teams and employees which can derive from any asymmetric dependence. This introduces serious challenges to the design of new organizational forms. They will rely on formal and informal set of rules people, in teams and in the organization, may be exposed to and which will be strictly connected respectively to teams’ and organizational institutional logics. New organizational forms have received scarce attention by institutional researchers who left the question how they are created largely unresolved in new institutional theory. In this article we discuss how a self-managed team-based firm re-solved coordination problem through the analysis of the new organization forms they were established on their transition from traditional, planning-intensive and linear product development approaches to more iterative and self-organized approaches inspired by Scrum methodology. The focal multinational organization in a telecommunication industry tried to combine two conflicting logics- the logic of efficiency and productivity driven by the Scrum framework, and the logic of long-term goals needed for firms’ survival like learning and innovation. They integrated elements of both logics in the new established organization forms and worked to make it as an accepted approach to cope with a balanced strategy.