Microdivisionalization as a way toward dynamic capability

• Published in: Management decision Vol. 59; no. 3; pp. 506 - 523
• Main Authors: Chen, Roger (Rongxin), Wang, Liang, Li, Eric Ping Hung, Hu, Guodong
• Format: Journal Article
• Language: English
• Published: London Emerald Publishing Limited 04.05.2021; Emerald Group Publishing Limited
• Subjects: Appliances; Corporate headquarters; Decentralization; Decision making; Ecosystems; Employees; Entrepreneurs; Innovations; Manufacturers; Manufacturing; Small business; Haier; Micro-foundation; Dynamic capability; Microdivisionalization
• ISSN: 0025-1747; 1758-6070
• DOI: 10.1108/MD-09-2019-1329

PurposeAs entrepreneurial top management teams in multidivisional forms are typically treated in pertinent literature as the default organizational solutions for developing dynamic capabilities, the emerging innovative organizational forms tend to be overlooked, even though they could be a viable means of transforming established enterprises. The present case study examines how Haier's microenterprise and platforms influenced the firm's dynamic capabilities development.Design/methodology/approachThe paper presents a qualitative case study of Haier Group Corporation in China.FindingsThe findings indicate that Haier employed a loosely coupled relationship between its headquarters and the microenterprises, developed quasi market-based exchange relationships and established peer-to-peer learning opportunities and coordination among its microenterprises. Data analyses further revealed that Haier has adopted three-step routines to capture market opportunities and enhance operational efficiency. This research extends the sensing-seizing-reconfiguration model typically recommended in the existing literature. It also demonstrates that organizational configuration is an important aspect of dynamic innovation. In summary, the study results showcase microdivisionalization as a new way for developing dynamic capabilities to better adapt to the ever-changing market environments.Originality/valueIn summary, our study showcased microdivisionalization as a new way for firms to change the organization structure and business strategies to better adapt to the ever-changing market environments.