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Core Process

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Structure forms around an organization's basic method of transforming raw materials into finished products. Every organization has at least one core technology that includes raw materials, activities that turn inputs into outputs, and underlying beliefs about the links among inputs, activities, and outcomes (Dornbusch and Scott, 1975).

Core technologies vary in clarity, predictability, and effectiveness. Assembling a Big Mac is relatively routine and programmable. The task is clear, most potential problems are known in advance, and the probability of success is high. Its relatively simple core technology allows McDonald's to rely mostly on vertical coordination.

In contrast, Harvard's two core processes—research and teaching—are far more complex and less predictable. Teaching objectives are knotty and amorphous. Unlike hamburger buns, students are active agents. Which teaching strategies best yield desired results is more a matter of faith than of fact. Even if students could be molded predictably, mystery surrounds the knowledge and skills they will need to succeed in life. This uncertain technology, greatly dependent on the skills and knowledge of highly educated professionals, is a key source of Harvard's loosely coordinated structure.

Core technologies often evolve, and significant technical innovation calls for corresponding structural alterations (Barley, 1990). In recent decades, struggles to integrate new technologies have become a fateful reality for many firms (Christensen, 1997; Henderson and Clark, 1990). Existing arrangements often get in the way. Companies are tempted to shoehorn innovative technologies into a box that fits their existing operations. As we saw with the decline and fall of Kodak, a change from film to digital photography, slide rules to calculators, or “snail mail” to email gives an advantage to new players less committed to the old ways. In his study of the disk drive industry from 1975 to 1994, Christensen (1997) found that innovation in established firms was often blocked less by technical challenges than by marketers who argued, “Our customers don't want it.” By the time the customers did want it, someone else had grabbed the market.

Some organizations are more susceptible than others to outside influences. Public schools, for example, are highly vulnerable to external pressures because they have limited capacity to claim the resources they need or to shape the results they are supposed to produce. In contrast, an institution like Harvard is insulated from such intrusions by its size, elite status, and large endowment. It can afford to offer low teaching loads, generous salaries, and substantial autonomy to its faculty. A Harvard diploma is taken as sufficient evidence that instruction is having its desired effect.

Reframing Organizations

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