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New Organizations/Reorganization

New Organizations/Reorganization

New Organizations/Reorganization

This article analyses the changing principles of structural organization of the governmental agencies in the welfare administration in Norway. Through the use of instrumentally oriented organization theory and empirical data based in public documents and interviews, we analyse how welfare administration changes through the implementation process when organizational principles are rebalanced based on changing actor patterns, negotiations and path dependencies. The study illustrates that contradictions and complexities in organizational design are enduring features of public sector organizations.Points for practitionersAdministrative reforms may change during the implementation process and are often multi-dimensional because interests and organizational principles are rebalanced when bureaucrats implement what politicians have decided. It seems to be difficult to find a stable balance between different principles of specialization, and specialization increases the need for coordination. Administrative reforms are not only about internal administration but are also a political process where political, administrative and professional logics clash and are balanced and rebalanced. Organizational structures are not only about efficiency but also tend to favour some processes, ideas, clients, users and actors over others.

We develop a theoretical perspective on how inconsistencies between formal and informal organization arising from reorganization can help create ambidextrous organizations. We argue that under some conditions, the informal organization can compensate for the formal organization by motivating a distinct but valuable form of employee behavior that the formal organization does not emphasize, and vice versa—an effect we label compensatory fit. We illustrate the concept of compensatory fit by drawing on qualitative data from a reorganization at Cisco Systems. We also derive formal boundary conditions for compensatory fit using a simple game theoretic representation. We show that compensatory fit can only work when there is a powerful informal organization already in existence, and when the gains from ambidexterity are substantial. Further, depending on the strength of the informal organization, breakdown in the conditions necessary for compensatory fit may lead to performance declines and further reorganizations.