Institutions, Information Processing, and Organization Structure in Research and Development: Evidence from the Semiconductor Industry

This paper examines some determinants of the choice between focused and distributed modes of organization in research and development (R & D). It argues that as organizations face mounting information-processing challenges, posed by complexity and uncertainty and inherent in innovation, they gravitate towards either a focused or distributed organizational form. The paper argues further that the institutional context within which organizations operate exerts an important influence on their choice between these forms. These themes are explored through a statistical analysis of programs to develop novel manufacturing processes in the global semiconductor industry. The results show that while Japanese organizations adhered to a distributed form of organization, US firms moved towards a more focused mode.