Organization Strategy and Structural Differences for Radical Versus Incremental Innovation

TLDR

Radical innovation requires distinct strategy and structure, especially for process adoption, whereas incremental innovation is supported by traditional arrangements. The study tests a model proposing that the strategy–structure causal sequence differs between radical and incremental innovation. Data from the food‑processing industry confirm that radical process and packaging adoption is driven by aggressive technology policies and technical specialist concentration, while incremental process adoption and new product introduction thrive in large, decentralized organizations with market‑dominated growth strategies, and that centralization and top‑manager support are critical for radical change.

Abstract

The purpose of this study was to test a model of the organizational innovation process that suggests that the strategy-structure causal sequence is differentiated by radical versus incremental innovation. That is, unique strategy and structure will be required for radical innovation, especially process adoption, while more traditional strategy and structure arrangements tend to support new product introduction and incremental process adoption. This differentiated theory is strongly supported by data from the food processing industry. Specifically, radical process and packaging adoption are significantly promoted by an aggressive technology policy and the concentration of technical specialists. Incremental process adoption and new product introduction tends to be promoted in large, complex, decentralized organizations that have market dominated growth strategies. Findings also suggest that more traditional structural arrangements might be used for radical change initiation if the general tendencies that occur in these dimensions as a result of increasing size can be delayed, briefly modified, or if the organization can be partitioned structurally for radical vs. incremental innovation. In particular, centralization of decision making appears to be necessary for radical process adoption along with the movement away from complexity toward more organizational generalists. This suggests that a greater support of top managers in the innovation process is necessary to initiate and sustain radical departures from the past for that organization.