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Structural ambidexterity in the public sector to overcome the conflict between bureaucracy and innovation

A case study for the municipality of Tilburg

Master thesis research by Jasper de Werdt

In June 2016, Jasper de Werdt graduated from the Tilburg School of Economics and Management at Tilburg University. He followed the master Strategic Management and wrote his master thesis in the area of structural ambidexterity in the public sector.

Over the last decades, increased attention has been paid to public sector entrepreneurship - the process of creating value for citizens by bringing together unique combinations of public and/or private resources to exploit social opportunities (Morris & Jones, 1999). Besides advantages, entrepreneurship creates challenges for public organizations, a significant one being the potential conflict between innovation and bureaucracy within the organization. The municipality of Tilburg is such a public organization, which contains some bureaucratic characteristics that make it difficult to innovate. In order to enable the municipality of Tilburg to innovate the application of structural ambidexterity, another concept grounded in private sector research, is proposed. This concept suggests organizations should separate their new, exploratory units from their traditional, exploitative ones, allowing for different processes, structures, and cultures (O’Reilly and Tushman, 2004).

Organizations operating in the public sector have much in common with large private corporations. Besides similarities such as having formalized hierarchies, and fairly rigid systems governing financial controls, they also benefit from the application of entrepreneurship to generate new sources of revenue and provide enhanced services through innovation. With most of their employees working full-time, personnel policies based upon role performance, and the major portion of their output not directly or indirectly evaluated in any external markets (Downs, 1967), organizations in the public sector are often seen as bureaucratic. This research attempts to determine how the municipality of Tilburg can make use of structural ambidexterity in order to overcome the conflict between bureaucracy and innovation?

The question was addressed by conducting both a literature review and a qualitative study based on ten interviews with employees from three different departments of the municipality of Tilburg.

The outcomes show that the respondents indeed perceive a conflict between bureaucracy and innovation at the municipality of Tilburg. The municipality achieves to keep the exploitative activities in control, but is struggling with explorative activities as a result. Thus, by not separating its explorative divisions from its exploitative ones, the municipality of Tilburg is not using the concept of structural ambidexterity at the moment. It does have a Strategy and Control division that is designed the way an explorative division should be according to literature. However this division is nog operating independently from primary divisions.  Therefore, the municipality should set up an explorative division which is designed a lot like the Strategy and Control division, but is operating independently from the other divisions in order to really make use of structural ambidexterity. As a result, the municipality will be able to be explorative and exploitative simultaneously, and it may overcome the conflict between bureaucracy and innovation.

In conclusion, this study could be of importance for the municipality of Tilburg, which is encouraged to position the explorative division in an independent manner to ensure that the innovations will not be restrained by the bureaucratic characteristics of the organization. Of course, other municipalities that struggle with innovation can also take these findings into account.

 

References:

Downs, A. (1967). Inside bureaucracy. Boston: Little, Brown

Morris, M. H., & Jones, F. F. (1999). Entrepreneurship in established organizations: The case of the public sector. Entrepreneurship Theory and Practice, 24(1), 71-91

O'Reilly, C. A., & Tushman, M. L. (2004). The ambidextrous organization. Harvard Business Review, 82(4), 74-83.