Seminar by Christian Rupietta



Performance Dynamics and Changes of Organizational Configurations

Seminar by Christian Rupietta, Schumpeter School of Business and Economics, University of Wuppertal, Germany

Research on organizational configurations, sets of firms with similarities in essential characteristics, provides important insights into the synergies among structural characteristics and into the performance effects of firms that retain, adapt to, or decouple from organizational configurations.
The fundamental assumption in the literature is that the better a firm "fits" with an ideal-type configuration, the higher its performance. So far, however, the literature assumes that these highperformance configurations remain unaltered over time, thereby neglecting the changes of configurations and the performance dynamics of firm’s movements between configurations over time.
In this paper we use a mix of set-theoretic and econometric methods to analyze a balanced panel of 244 Swiss firms between 2005 and 2011. Our set-theoretic analysis identifies four temporally stable high-performance configurations: the "professional service firm, "the "organic," the "mechanistic," and the "small bureaucracy." We show that—even within this relatively short period—firms are exceptionally versatile in their movements between configurations over time, suggesting that highperformance configurations appear enduring not in spite but because of firms’ movements through configurations. Additionally, our conometric analysis demonstrates that firms dislodging from a highperformance configuration experience drastic performance declines. Yet, only those firms that engage in continuous adaptation exhibit both high performance levels and, more importantly, also high performance growth rates. Thereby, our findings shed light on the complexity of the “fit”-performance association. We suggest that firms with a good “fit” will not only benefit from adapting to a highperformance, firm-unspecific configuration, but will— through adaptation to such a configuration—additionally improve their ability to exploit inimitable firm-specific resources.