Organizational structure, information technology, and R&D productivity

To improve R&D productivity and performance, two types of communication must be managed property. First, there is communication which is required to coordinate the many complex tasks and subsystem interrelations that exist on an R&D project. Second, there is communication which insures that the technical staff of the project remain current. Organizational structure can be employed to achieve either of these goals. Since different structures are needed for the two, it is important to consider the situations in which one or the other dominates. A tradeoff is necessary. Project organization facilitates task and subsystem coordination. Functional organization connects engineers more effectively to the technologies upon which they draw. The manager must determine the situations in which one or the other goal dominates and employ the organizational structure appropriate to that goal. The present paper provides three parameters which can be used to characterize project situations and guide the decision on organizational form. In addition, there is the possibility that improvements in information technology will be able to substitute for one of the two organizational forms and allow greater use of the other, thereby easing the organizational tradeoff.