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Command or Conviction? Informal Networks and the Diffusion of Controversial Innovations

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This chapter contributes to the understanding of the adoption of controversial innovations in the context of organizational change. In situations of controversy, organizational change is likely to be resisted. The authors argue that the management-induced diffusion of new conventions and behaviors related to communication and cooperation in an organization depends on informal and lateral rather than formal and hierarchical networks of communication. In their empirical study on corporate change from technology to market-orientation in a medium-sized ophthalmological engineering company in southern Germany, the degree of convergence toward market-orientation depends on the social proximity to the promoters of innovation in an informal knowledge network. They find that social proximity to promoters in the formal network has no effect. Hence, in situations of controversy innovations are more likely to diffuse through informal relations of conviction than through formal relations of command
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... Due to circular time conceptions (Ibert, 2004), stable and permanent forms of the organization encourage process improvement, failure eradication, and knowledge accumulation. However, a wide variety of concepts such as structural inertia (Hannan and Freeman, 1984;Agócs, 1997), the lack of absorptive capacity and dynamic capabilities (Protogerou et al., 2011;Verona and Ravasi, 2003;Cohen and Levinthal, 1990;Tsai, 2001), or controversial innovation (Glückler, 2014;Krackhardt, 1997) illustrate the problems that may arise when trying to integrate new ideas into permanent organizations (Scarbrough et al., 2004;Glückler and Panitz, 2014). Conversely, an increasing number of studies highlights the crucial role of informal networks and temporary forms of organization as flexible complements for formal organizations (Grabher, 2011(Grabher, , 2004Krackhardt, 1996). ...
... Furthermore, informal networks offer alternative channels for the diffusion of information, ideas, and innovations, developments which may otherwise be blocked off by formal decision-making boards and reporting lines (e.g. Glückler and Panitz, 2014;Glückler, 2014). Organizational and interpersonal relationships-as well as the relationships between individuals and organizations-are of recent interest in network research (Lazega et al., 2008;Brennecke and Rank, 2016). ...
... A key element of organizing is formally defined reporting and command lines, which serve to coordinate actions and to channel information top-down and bottom-up within and across the different units of an organization. However, the flattening of hierarchies and transformations from established routines to temporary project settings may limit the extent to which formal lines of reporting affect the structure of informal knowledge exchange as well as the channels through which innovation and organizational change are distributed (Glückler and Panitz, 2014). (iii) Experience and tenure within the organization. ...
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... Reasons for controversy and resistance in innovation can also be related to blockages within organizational hierarchies, in both a bottom-up and a top-down manner. This may be the case when novel standards and procedures run up against established interests and routines, as in the case of new business models (Glückler 2014) or new strategic orientations (Glückler and Panitz 2014). The continuous reinforcement of established ways of thinking and working through members of an organization leads to the formation of mental models and institutional orders. ...
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Thesis
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