The Necessary Nature of Future Firms

George P. Huber teaches "Organizational Change and Redesign" in the Executive MBA program and "Organizational Decision Making" in the doctoral program at The University of Texas at Austin, where holds the Charles and Elizabeth Prothro Regents Chair in Business Administration. His current research focuses on organizational change, organizational design, and organizational decision making. He has also conducted and published research in the areas of information technology and individual and group decision making. Dr. Huber is a Fellow of the Academy of Management and of the Decision Sciences Institute and is a charter member of the Academy of Management Journals Hall of Fame. In 1993, his co-edited book, Organizational Change and Redesign: Ideas and Insights for Improving Performance, was published by Oxford University Press, and in 1995 his co-edited book, Longitudinal Field Research Methods: Studying Processes of Organizational Change, was published by Sage Publications. Dr. Huber has held full time positions with the Emerson Electric Manufacturing Company, the Procter and Gamble Manufacturing Company, the U.S. Department of Labor, Execucom Systems Corporation, and has served as a consultant to many corporations and public agencies. Professor Huber has held full time faculty appointments at the Universities of Wisconsin, California, and Texas.

Chapter 1 Dangerous Deficiencies WHAT IS HAPPENING? WHAT IS NOT? THE ROLE OF TOP MANAGEMENT ABOUT THIS BOOK Chapter 2 The Future Environments of Business Organizations SCIENTIFIC KNOWLEDGE AND IMPROVED TECHNOLOGY Scientific Knowledge Improved Technologies Mental Blocks to Imagining a Different World on the Same Planet Interim Summary and Transition THE COMPLEXITY OF FUTURE ENVIRONMENTS Environmental Variety Environmental Density and Interdependence Interim Summary and Transition ENVIRONMENTAL DYNAMISM AND COMPETITIVENESS Velocity, Turbulence, and Instability Environmental Competitiveness Chapter 3 Sensing and Interpreting the Environment FACIT AB IMPORTANCE OF ENVIRONMENTAL SENSING AND INTERPRETATION Consequences and Importance of Interpretation ENVIRONMENTAL SENSING IN FUTURE FIRMS Intelligence Gathering Intelligence Gathering As a Staff Function? As an Outsourced Function? Intelligence Gathering As Specialized Accountability Intelligence Gathering As Eclectic Responsibility Supporting Sensors Probing the Environment Sensing Early Responses to the Firm's Actions and Products Top Managers As Environmental Sensors INTERPRETING WHAT IS SENSED Declines in Quality and Timeliness of Organizational Interpretations Enhancing Interpretation in Future Firms Faulty Interpretations Chapter 4 Organizational Decision Making DECISIONS AND DECISION MAKING RESOURCE IN FUTURE FIRMS Increasing Environmental Dynamism and Its Consequences Increasing Environmental Complexity and Its Consequences Increasing Competitiveness and Its Consequences Decision Maker Capabilities: Past, Present, Future DECISION MAKING PRACTICES IN FUTURE FIRMS Ensuring Scope Ensuring Speed Effects of Forthcoming Information Technologies on Decision Speed and Scope IT Investments Focused on Analysis IT Investments Focused on Communication TEMPTING PRACTICES Intuitive Decision Making Satisfying and Analogizing Firms' Responses to Personal Propensities to Use Short-cut Methods Chapter 5 Knowledge Acquisition: Organizational Learning LEARNING, KNOWLEDGE, AND INNOVATION ORGANIZATIONAL LEARNING: A PRACTICE WHOSE TIME HAS COME LEARNING FROM EXPERIENCE Highly Effective Learning Experiences: Designed Experiments Highly Effective Learning Experiences: Natural Experiments Highly Effective Learning Experiences: Learning from Action Probes and Operations Highly Effective Learning Experiences: Learning by Observing Samples of One or Fewer LEARNING FROM OTHERS - VICARIOUS LEARNING Absorptive Capacity Importing Knowledge in the Form of Expertise Enhancing Organizational Learning by Enhancing Individual Learning INTRODUCING LEARNING PRACTICES Chapter 6 Leveraging Learning through Knowledge Management SEMATECH THE FOUR REPOSITORIES OF ORGANIZATIONAL KNOWLEDGE THE NEED TO MANAGE KNOWLEDGE DIRECT, INFORMAL KNOWLEDGE SHARING An Example of How Motivation Can Negatively Affect Direct, Informal Knowledge Sharing Organizational Culture: An Achievable Solution to the Problem of Motivation? KNOWLEDGE MANAGEMENT SYSTEMS Motivational Issues in Knowledge Management Systems Managing Motivation in Knowledge Management Systems Situational Influences Favoring the Use of Extrinsic Motivators Long-lived traditions and cultures Increased use of teams, and of incentives for team performance Lower levels of organizational and group identification Person-to-Person Knowledge Sharing from a Distance PLANNED KNOWLEDGE TRANSFER ACROSS TEAMS Capturing and Transferring Team Learning Obstacles to Intra-Organizational Knowledge Transfer, and Solutions Chapter 7 Innovation: The Integration and Exploitation of Knowledge OCCUPATIONAL SPECIALIZATION WITHIN-FIRM APPROACHES TO INTEGRATING KNOWLEDGE: A BRIEF RECOUNTING OF CURRENT STRUCTURES AND PROCESSES Interim Summary and Transition KNOWLEDGE INTEGRATION STRUCTURES IN FUTURE FIRMS CHANGES IN INTRA-FIRM STRUCTURES AND PROCESSES Dividing and Coordinating the Work Coordination Processes INTER-FIRM STRUCTURES Knowledge Transfer Between Levels and Across Firms: A Brief Update on Current Practice CHANGES IN EMPLOYMENT PRACTICES Changes in Staffing Practices Finding Expertise CHANGES IN EXPERTS' EMPLOYMENT STRATEGIES Factors Curtailing the Growth in Independent Contracting Chapter 8 Dealing with the Simultaneous Needs for Change, Productivity, Flexibility and Employee Commitment MORE-THAN-OCCASIONAL CONFLICTS Change-Productivity Conflict Change-Commitment Conflict Change-Flexibility Conflict Productivity-Commitment Conflict Flexibility-Productivity Conflict and Flexibility-Commitment Conflict DOWNSIZING Downsizing in the Future Forces Inhibiting Downsizing Loss of Organizational Knowledge Lower Productivity of Retained Employees Decreased Effectiveness of Inter-firm Relations Increases in Unwanted Turnover USE OF TEMPORARY AND CONTRACT WORKERS Forces Inhibiting Use of Temporary Workers CHANGE AND CULTURE Environmental Effects on Future Firms' Cultures Environmental Effects on Management's Culture-managing Actions and Success Unintended Adverse Effects on the Firm's Culture How Cultures Affect the Ability of the Firm to Change CULTURE AND COMPENSATION Organizational Culture Changes in the Conditions Favoring Direct Supervision Changes in Conditions Favoring Pay for Performance Changes in Conditions Favoring Pay for Performance for Teams Changes in Conditions Favoring Use of Organizational Culture Epilogue

"While many books deal with decision making and many more deal with environmental complexity, this is one of the first to lucidly tie them together and provide executives with the specific tools and mind-set necessary to bring about significant organizational change. The University of Wisconsin-Madison is a key driver of the integration of business and science, and this book will be a must-read for many of the students in our masters and executive education programs." -- Mason A. Carpenter "The book offers yet another outstanding contribution by an author known for scholarship and insightful observations about the state of organizations and their management. The topic is timely and the book offers many useful ideas that will find their way into practice. I highly recommend it." -- Paul C. Nutt "This book is a must read for managers concerned with guiding their organizations into the information age. Management futurologists and academic writers have speculated on the features and characteristics of new organizational forms. The Necessary Nature of Future Firms by George Huber represents the first rigorous in-depth effort at anticipating the shape of new organizations by combining, recombining, and interpreting a vast management research literature and presenting it to managerial audiences. The book is very accessible to a broad managerial audience but especially to forward looking thoughtful managers concerned with the future of their organizations." -- Arie Y. Lewin "In The Necessary Nature of Future Firms, George Huber does what Huber does best--paint a compelling vision of the design of (near) future organizations as well as the implications of this design. What differentiates Huber's 'visioning' efforts from most others is that they are derived not from speculation but rather from the collective thinking of a generation of organizational scientists as interpreted through Huber's own research and consulting experiences. This vision of how future firms will be designed (and, hence, how they will behave) emerges in fact from well-founded conceptualizations and validated observations." -- Robert Zmud "George Huber has written a wonderfully comprehensive and integrative book on organizational change, learning, and adaptation. Huber synthesizes the research-based work on change in a way that will be helpful to scholars, graduate students, as well as managers interested in organizational learning and change. The book is well written and provocative. It is a state of the art literature review with an experienced, practical point of view. This book belongs on both the scholar's desk as well as in the practitioner's office." -- Michael L. Tushman "Professor Huber has produced a valuable and very well researched guide for firms making the necessary transition to the knowledge economy. His sage advice and experiences will greatly help any organization navigate these tricky and dangerous waters." -- Dr. Lawrence Prusak "George Huber has achieved an amazing feat in this book. He has eloquently described what it will take for companies to prosper in the future by drawing upon what we know today--what we really know, based on rigorous research--about speed flexibility, learning, and innovation. Anyone interested in preparing firms for tomorrow will benefit from this important book." -- Don Hambrick "Provocative, insightful, and an extraordinary useful look at managing complex organizations in rapidly changing environments. This book must be read by managers and scholars trying to comprehend the challenge of managing in uncertain times under compressed time constraints." -- Ken G. Smith "In this rich and comprehensive book, George Huber calls on managers to take stock of their companies through a careful and systematic analysis of environmental and other pressures that will shape the nature of business into the future. The depth of analysis and detailed advice for managers is impressive. The book provides leading-edge perspectives on knowledge management, change, culture, strategy, and many aspects of decision making and human resource management. This is a timely and comprehensive book that includes everything the informed manager needs to know to examine his or her business and move it successfully into the future. This is a must read for the serious, thoughtful executive." -- Gerardine DeSanctis "The Necessary Nature of Future Firms is cleverly written, grounded in history, integrates an unusually extensive survey of organizational research, and is filled with evocative examples and practical guidelines which should make it great reading for practitioner and theorist alike. Huber has accomplished a rare feat--he has created a book that is both practically relevant for executives and suggests many viable avenues for organizational scholarship." -- Kathleen M. Sutcliffe "After a lifetime of important insights in the areas of organizational design and decision making, Huber has produced his magnum opus. His insights and ideas can help even the most seasoned manager see the world differently and become more effective." -- C. Chet Miller "This is an important book for any manager who faces a rapidly changing and increasingly competitive environment--which is to say, virtually every manager. Huber makes a cogent case for the fact that businesses will face much more dynamic and competitive environments in the future than they face today. More importantly, he offers practical advice for how managers can prepare for the uncertain future they face. Clearly written and carefully grounded in the best research evidence available, this book stands head and shoulders above the many management books offering short-term fads, fashions, and therapies of the moment." -- Richard T. Mowday "Huber gives a compelling account of the future landscape that many managers have to face today. Filled with solid academic research laced with real-world examples, Huber not only conveys the shape of that landscape, but also the roadmap to navigate it." -- Kathleen M. Eisenhardt "George Huber makes an important contribution with profound insights on what the future firm will look like. It will be congruent with its environment. To realize opportunities from continuing advances in science and technology and environmental complexity, the successful firm in the future will be especially good at gaining environmental intelligence, learning and integrating knowledge, and being innovative and flexible. This is not a fanciful prophesy; it is a necessary logical conclusion that Huber draws from an extensive body of scientific knowledge." -- Andrew H. Van de Ven "Huber's The Necessary Nature of Future Firms is a remarkable tour de force of state-of-the-art knowledge about organizational structures, processes and performance. The book integrates what we know about fundamental phenomenon in organizations such as decision making, learning, and innovation. What is exceptional about the book is Huber's ability to integrate research findings to develop thoughtful guidelines for managers about how to design their firms to be effective, both now and in the future." -- Linda Argote "The book is written in an easy style and has no management jargon. It also provides flow charts and appendices wherever necessary to facilitate understanding. The notes at the end of each chapter and selected references at the end of the book provide an inquisitive reader a rich source to dig deeper. The book also provides interim and final summaries of each chapter, which greatly enhances recapitulation. the book is mainly meant for managers and graduate management students." -- Amit Dhiman