Organization design and firm heterogeneity: Towards an integrated research agenda for strategy

Florian Englmaier, Nicolai J. Foss, Thorbjørn Knudsen, Tobias Kretschmer

Research output: Chapter in Book/Report/Conference proceedingBook chapterResearchpeer-review


The authors argue that organization design needs to play a more active role in the explanation of differential performance and outline a set of ideas for achieving this both in theoretical and empirical research. Firms are heterogeneous in terms of (1) how well they do things, capturing persistent productivity differences, and (2) how they do things – and both reflect firms’ organization design choices. Both types of heterogeneity can be persistent, and are interdependent, although they have typically been studied separately. The authors propose a simple formal framework – the “aggregation function framework” – that aligns organization design thinking with the emphasis on performance heterogeneity among firms that is characteristic of the strategy field. This framework allows for a more precise identification of how exactly organization design may contribute to persistent performance differences, and therefore what exactly are the assumptions that strategy and organization design scholars need to be attentive to.

Original languageEnglish
Title of host publicationOrganization Design
EditorsJohn Joseph, Oliver Baumann, Richard Burton, Kannan Srikanth
PublisherEmerald Group Publishing
Publication date2018
ISBN (Print)978-1-78756-330-8
ISBN (Electronic)978-1-78756-329-2, 978-1-78756-331-5
Publication statusPublished - 2018
SeriesAdvances in Strategic Management


  • Aggregation function
  • Competitive heterogeneity
  • Design heterogeneity
  • Design inertia
  • Persistent performance differences
  • Strategic organization design


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