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Managing the Uncertainties of Innovation: Extending Thompson (1967)
J.-C. Spender[1,2] and Eric H. Kessler[1]
Thompson (1967, p. 159) wrote that: "Uncertainty appears as the fundamental problem for complex organizations, and coping with uncertainty, as the essence of the administrative process." Determined to incorporate uncertainty into his theory of organizations rather than simply ignore it, as so many previous theorists had done, he proposed a two domain model in which the organization had a stable core of productive activity sheltered by a mantle of uncertainty-absorbing boundary-spanning activity. He associated the core activities with the firm's rational efficiency-seeking activities and associated the boundary spanning activities with its natural system uncertainty resolving activities. He contrasted the two modes of governance so revealing separable activity domains within the organizational entity (1967, p. 74).
Subsequent generations of organization theorists have been much influenced by Thompson's ideas. We build on the same model but create a more explicit link with Burns and Stalker's (1961) equally influential distinction between the mechanistic and organic modes of governance. We thereby extend the scope of Thompson's analysis. Our model, in which the two domains are separate but related, is considered in the context of managing the innovation process. Starting out with the conventional multi-stage model of the innovation process, which moves from problem identification to solution implementation, we consider (a) how the influence of each mode of governance varies between stages, and (b) how the two domains interrelate. We conclude that the model Thompson developed was a special case of a more general model. Whereas he treated uncertainty as largely external in origin, innovation implies an internal source of uncertainty, so the uncertainty absorbing activity also needs to be internal. But we also argue that the innovation process must be contained within a mantle of stable rationality. With few exceptions, such as Duncan (1976), Daft (1982), and Katz and Allen (1985), writers on innovation have overlooked the interplay and coupling of these two modes of governance.
TWO MODES OF GOVERNANCE
The contrast between the rational and natural models of organization is now an established part of organization theory (e.g., Scott, 1992, p. 22). The rational model is defined by its chosen purpose and the deliberate choice of means to that end. These choices are "of...