This is a textbook used for courses taught in the Wharton School, specifically for courses that deal with the management of technology and innovation (MGMT 237 in particular). I was referred to this text by Dr. William Hamilton who is the founder of the Jerome Fisher Program in Management & Technology - an undergraduate dual-degree program with Wharton and SEAS. After discussing my research topic with Dr. Hamilton, he referred me to Chapter 10 of this text as a starting point in researching more on the organizational methods companies take when innovation is such an important factor in their business. Professor Hamilton notes that even though the cases discussed within the text do not specifically reference the Hollywood film industry, the chapter will help immensely in learning more about what drives companies towards or away from innovation. The text also has some wonderful further reading suggestions.

Chapter 10 focuses on structures within a firm that can lead to implementing an innovation strategy. By looking at research on different corporate structural dimensions in relation to firm size like formalization, standardization, and centralization, one can understand how these affect a company's propensity towards innovation. The size of an organization can greatly influence the possibilities for innovation. It has been argued that smaller organizations are less rigid in their procedures and are more into fostering research, experimentation, and creativity. The other side of that argument is that as long as a large entity is organized efficiently and employs practices that are well-thought-out, development opportunities are also very likely to be implemented effectively.

The three structural dimensions noted above are the three factors most associated with affecting a firm's inclination towards innovation, as well as its possible success. Formalization involves rules, protocols, and the written communications that are used to help shape individual or group conduct within the company. Formalization has often acted as a way to manage, especially when you have less managers. The problem here is that when you have too much formalization it can lead to rigidity within the company and it's working community. Standardization involves uniformity, and how the company's standards, day-to-day operations, projects, etc. are performed in a consistent manner. In the same way that formalization can cause rigidity, so can standardization represent a significant roadblock towards adopting innovating practices. Centralization is how much decision-making capabilities are kept at the uppermost levels of management, while decentralization refers to the lower levels of a company and the amount of decision-making that is made at this level.  This concept is often looked at in a geographical sense - firm activities can either be held in a central location, in this case, at company headquarters, or a decentralized location far away from headquarters.  These two concepts can not determine a propensity towards innovation in a cut and dry sense; they both have positive and negative affects on the possibilites for innovation.

Organizational structures have been divided into two traditional categories by scholars:  mechanistic structures, which are good for maintaining efficiency (and incorporates formalization and standardization) and organic structures, which are seen to be freer and more open to creative and progressive activities.  There are companies that try to adopt both a mechanistic and organic structure - these are called ambidextrous organizations.  Trying to balance both is a constant struggle for multinational corporations who find the need to innovate and develop new products and business schemes imperative to compete in their marketplace.