Innovation and Development Activities in Professional Service Firms – a Role Structure Perspective, doctoral dissertation by Tiina Tuominen

By Riku Seppälä

I attended the public defence of Tiina Tuominen’s doctoral dissertation at Aalto University in Otaniemi, Espoo on 22nd February.  Title of her thesis is Innovation and development activities in professional service firms- a role structure perspective.  The thesis can be found here: http://otalib.aalto.fi/en/collections/e-publications/dissertations/

Thesis’s perspective is on role structures inside professional service firms (PSF) and studies how innovation is dispersed in PSF.  In contrast to other types of organisations (for example industrial companies), in the companies she studied, innovation processes and actions were spread throughout the organization.  Innovation has been widely studied but with an angle of role structure the area is still untouched. The main unit of analysis was innovation and development systems within a company. Theories such as social structure, organisations as social system and roles were studied.

Empirical part of the study involved qualitative approach and the primary data consisted of five different PSF’s and 54 interviews altogether.

Case organisations:

–          Advertising agency

–          Architect company

–          Advisery/ Auditing service company

–          Engineering company

–          Consultancy and management service company

Organisations as social systems

Social system:

–          Social entity that consists of patterned interdependent behaviors of individuals

Organisations as social systems differ from many social systems as they are set up intentionally and with a certain business goal in mind. Individuals can belong to many social systems as these often overlap each other.  The author describes social systems within an organization as innovation and development systems.

Definitions of social system and social structure by Giddens according to the author:

–           a social system can be defined as social practices that link persons in time and space, whereas a social structure is seen as the principles that pattern those practices

Role structure varies between every company where managerial control grows from dispersed to centralized structure. The thesis also deals with the fact of role expectations within a firm; rules need to be specified and resources allocated in order to make it possible for the individuals to even have time and resources to start innovating for the firm.

Five different role structures were identified and termed during the empirical study and are as follows.

–          Centralized

–          Co-ordinated

–          Empowered

–          Collective

–          Dispersed

Managerial control grows from being low in the dispersed structure to being high in centralized structure of roles.  The role structures might enable or hinder individual’s innovation depending on which type of structure is used in certain innovation in the PSF. Innovation varies from business decision innovations to IT-innovations, service innovations, r & d innovations and so on.

Centralized structure:

–          One or few makes decisions in the organization

–          Typically top management

–          Examples: organizational structure development

Coordinated structure:

–          Main ideas are derived from one or few members

–          Other are expected to take part in the development

–          Examples: strategic projects

Empowered structure:

–          Wider range of individuals take part of the development

–          Still coordinated by few

–          Example: development of organization wide tools

Collective structure:

–          Decisions are made collectively

–          Members of the organization are expected and encouraged to take part

–          Example: service development as a collective effort

Dispersed structure:

–          Individuals created anonymously novelties

–          Example: project specific improvements alongside normal customer work.

role_structure_tiina_tuominen_thesis

In each structure an individual’s ability to explore novel ideas varies:

–          Ability to innovate is seen as:

  • Explore novel ideas
  • Evaluate the usefulness of the idea
  • Mobilise resources for implementation

Also worth mentioning is the fact that service development can vary between units in a single firm. The flexibility in structures in the firm plays a big role in innovation and development. Can individuals shape roles and role structures? Role breaking, is it possible without harming ones career and profession.

Theoretical contribution

–          Role structure adds to understanding dispersed nature in innovation, ie. Innovation cannot be in the hands of few

–          Co-existence of different role structures

Key takeaways:

–          Clarify role expectations but leave slack

–          Discuss expectations

–          Employee involment

–          Boldly identifying and acknowledging the employees abilities

–          Willingness to innovate aim to create new, positive innovation but end result might not be positive.

Opponent, Maxine Robertson, professor, Queen Mary, University of London

What we know at the moment about PSF’s:

–          Innovation is ubiquitous

–          PSF’s are constantly seeking for more efficient ways to operate, iterate and to develop

–          Tensions are generated within organisations by professional autonomy

–          There are distinctive models of organizing

What we don’t’ know:

–          What motivates professional to innovate?

–          What relationships exist between different models of organizing different types of innovations?

–          What constraints exist around organizational innovation in different types of PSF’s?

Keywords and findings to me:

–          User driven innovation

–          Employee driven innovation

–          Routines à linked to innovativeness and competitiveness à mainly harms and hinders these

–          If innovation is a task it decreases

Conclusion

Role structures play an important role in PSF’s innovation and development. If you think about it, it all sounds clear, if innovation is in the hands of few top management individuals, it is for certain that the innovation actions from other professionals in the firm will decrease. The thesis pointed out that it is necessary to have role expectations in place, if not only the bravest ones will innovate.  As seen from the empirical data presented in the dissertation, innovation systems vary in each firm. The five distinctive role structures; centralized, coordinated, empowered, collective, and dispersed all have clear differences in each firm and type of innovation examples. Clearly the companies that innovate and are in the cutting edge of their business field must turn to more dispersed way of innovation.

I would suggest reading Tiina’s thesis if you are interested in role structures inside PSF and how they affect innovation.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s