Theories of organizational structure and innovation adoption: The role of environmental change

Innovation scholars face an enduring research problem: how to make models that are testable, yet reflect the complexity of real business environments. Typically, researchers of organizational innovation define their research by focusing on one dimension of innovation - type of innovation, radicalness of innovation, or stage of innovation - at a time. In reality, these dimensions overlap, which partly explains why past theories of the relationships between organizational structure and innovation have produced inconsistent results. In this paper, we develop a more complex model for structure-innovation relationships. First, we define four environmental conditions, using stability and predictability variables of environmental change. Second, we articulate organizational structure and innovation characteristics that would hold for firms under each of our four sets of conditions. This basic framework allows us to compare and subsequently to extend, the three theories of structure and innovation that address the dimensions of innovation mentioned above. Finally, we advance a series of propositions to predict the structural characteristics that facilitate adoption of innovations of different types at different stages, under four conditions of environmental change.