Intra-organizational collaboration for innovation. : Understanding the dynamics of formal and informal structures.

Abstract: Digitalization has led to a higher speed of product development and increased competition on the market. This has impacted how firms organize and manage innovation activities, where firms need to have certain abilities to quickly respond to the external environment in order to stay competitive in dynamic markets. As obtaining innovation capabilities internally require large amount of R&D expenditures, there are several strategies a firm can pursue in order to innovate more efficiently; such as pursuing an Open Innovation landscape, and investing in strategic alliances. However, as these strategies come with additional challenges and costs, focus has instead been turned to the internal environment, and collaborating more effectively internally for innovation purposes has received new light in recent research. Therefore, this study aimed at exploring the underlying structures and mechanisms of intra-organizational collaboration for innovation. Previous research on internal collaboration for innovation have investigated the formal and informal structures for knowledge sharing and joint problem solving. In this stream of research, there has been both consistent and mixed results on the enablers of collaboration. Firstly, previous research is consistent with the importance of trust and social interactions for informal collaboration. However, there exists mixed results on the impact of centralization on collaboration. Therefore, this thesis aimed to shed a new light on this topic, and answer the research question: What are the enabling factors for formal and informal collaboration? In an attempt to answer the research question, a qualitative study consisting of 13 interviews with innovation practitioners and corporate executives in the organizational setting of an IT-service company was conducted. The interviews aimed at providing insights on how collaboration for innovation across units and individuals was carried out, and were carefully recorded, transcribed and analyzed. The findings revealed both support for previous theory as well as provided with new insights, stating that centralized decision making, managers’ self-interest and a clear mandate enables formal collaboration; while decentralized decision making, social connections, employees’ mindset and geographical proximity enables informal collaboration. Particularly important for enabling informal collaboration is the possibility for social interactions between employees, their level of organizational awareness and their mutual trust. Furthermore, the results highlighted the presence of interdependencies between the enabling factors, and provided with a new insight on the impact of centralization by clarifying when and how centralization is an enabler of collaboration, and where firms benefit from decentralized decision making instead. The results indicate that centralized decision making enables collaboration on a strategic “macro” level, and decentralized decision making enables collaboration on a “micro” level.