Abstract for: Bureaucracy and Innovation Revisited: A 60-Year Update Incorporating Organizational Culture

In a world of major technical and social disruptions, our organizations are forced to innovate. Often embedded in bureaucratic structures and work procedures, finding the balance between bureaucracy and innovation is a challenge. Using a system dynamics (SD) approach, our research contributes to ongoing discussions about the relationship between bureaucracy and innovation across the scientific and management communities. Based on insights from the behavioral sciences, we develop a causal loop diagram (CLD). The CLD is then transformed into a stock-and-flow diagram. The model considers both an organization and its environment. Besides bureaucracy and innovation as core variables, we also include innovative culture. We limit our model to public-sector organizations. From a variety of simulation experiments, we have selected a set of scenarios. These scenarios illustrate how changes in the organization’s environment affect its bureaucracy and innovation. The results reveal that well-intended management interventions can cause an organization’s collapse. The reason is the role of organizational culture. Our research illustrates the benefits of SD as a management tool. Furthermore, it reveals that organizational culture decides about an organization’s success. However, our model does not provide guidance on how to improve organizational culture towards innovation. Splitting the appropriate model variable would significantly improve the usefulness of our model. This task is up to the next model version. AI is used for grammar and spell checking.