Understanding the invention phase of management innovation: a design theory perspective

• DOI: http://doi.org/10.1111/emre.12299
• Date: 01 June 2019
• Published date: 01 June 2019

Understanding the invention phase of

management innovation: a design

theory perspective

ALBERT DAVID

Paris-Dauphine University, PSL Research University, Paris,France

This paper aims at changingthe perspective on management innovation by considering management innovations

as managerial objects that come out of a design process. We choose Peter Drucker’s invention of management by

objectives and self-control as a case study. After reconstituting how precisely Peter Drucker came to invent MBO,

we use formal design theory concepts to analyze how the concept of MBO was generated. We identify four key

breakthroughs with respect to establishedmanagement ideas and practicesand we detect what earlier breakthroughs

were necessary, so including the invention of MBO within the historical evolution of management concepts. We

discuss the conceptual genealogy obtained and conclude on how a design theory perspective on management

innovation could be generalized, how it could improve the way we tell the history of management thought and

practice and how we could better conceive and steer future management innovation processes.

Keywords: management innovation;design theory; history of managementthought; Peter Drucker; managementby

objectives and self-control

Introduction

What exactly do we know about the invention phase of

management innovation? Academic literature on the

evolution of manag ement thought and practice includes

hundreds of references than can help understand why

and how key management ideas and techniques emerged.

Major historical syntheses of management thought and

practices have been proposed from various perspectives

(Waring, 1991; O’Connor, 1999, 2012; Kleiner, 2008;

Wren, 2009). Some organizations, periods of time, or

key experiments have been quite extensively studied

(e.g., Chandler, 1962, about the emergence of the M-

Form; Roethlisberger and Dickson, 1939, about Mayo’s

Hawthorne experiments; Marrow, 1969, about Lewin’s

life and work and action research experiments at

Harwood, etc.). Furthermore, management innovators

themselves, such as academics like Mayo or Lewin, or

managers and consultants like Taylor (1911), Fayol

(1916), Brown (1927, 1958), Barnard (1938), Smiddy

(1956, 1962), Drucker

1

(1954), Sloan (1963) or Ohno

(1988) have written their own innovative contributions

to management ideasand techniques. Consequently, even

though certain differences exist between the reality of

management innovation as it emerged in context and

how it has been documented and theorized, detailed

historical material about major management innovations

is or should be available: we have clear ideas about how

Taylor invented scientific management, how Brown and

Sloan designed decentralized structures or how Ohno

invented just-in-time production systems.

Management innovation is now well referenced as a

specific domain of the literature on management

(Kimberly, 1981; Damanpour and Ewan, 1984; David,

1996, 2013; Hamel, 2006; Birkinshaw and Mol, 2006;

Birkinshaw, Hamel and Mol, 2008; Damanpour and

Aravind, 2012; Volberda, Van Den Bosch and Heij,

2013; RFG, 2013; Mol and Birkinshaw, 2014).

Established definitions consider management innovation

as ‘the invention and implementation of a management

practice, process, structure, or technique that is new to

the state of the artand is intended to further organizational

goals’(Birkinshaw et al., 2008, p. 825). Building upon

Schumpeter’s legacy, we can assert that management

innovation occurs when a management idea, principle or

technique: (1) represents a significant change in

established management thought and practice; and (2)

Correspondence: Albert David,Paris-Dauphine University,PSL Research

University, CNRS, DRM, 75016 Paris, France. E-mail:albert.

david@dauphine.fr

1

Peter Druckeralso had an academic position.

European Management Review, Vol. 16, 383–398, (2019)

DOI: 10.1111/emre.12299

©2018 European Academy of Management

meets a minimum demand on the management market,

that is, has some real effect on managerial efficiency and

a specific, recognized value that a simple invention does

not have. In this vein, scientific management, lean

management, operations research techniques, MBO or

activity based costing methods –among many others –

can be considered as innovations in management.

Historians of management produce the material that

describes how things happened: they write monographs,

they sometimes makechapters and organize the evolution

of thought and practices into ‘schools’or ‘ages’,suchas

the classical or rational school, the human relations

school, the systemic school, etc. Management innovation

researchers generally describe the invention process

through a typology of actors and cognitive activities

(Birkinshaw et al., 2008), propose a multi-level, co-

evolutionary model of generation/election/variation/

retention (Volberda et al., 2014) or analyze the

determining and driving factors of management

innovation (Damanpoor and Aravind, 2012). They often

illustrate their conceptual frameworks with examples of

known management innovation s, thus using historical

material in order to bring attention to pioneering

practitioners and major contributors (David, 2013; Mol

and Birkinshaw, 2014), to promote management

innovation as a key factor for efficiency in contemporary

organizations (Hamel, 2006; RFG, 2013), to illustrate

general models of the process of management innovation

(Birkinshaw et al., 2008) or to inspire the future of

management (Hamel, 2007).

A blind spot appears in between the two literatures:

neither historians of management thought and practices,

nor management innovation researchers seem to focus

on the management innovation process as an innovation

process, as if ‘innovation’was a natural concept. Nor do

they centrally question managementideas and techniques

as objects to be designed,asif‘management’,

‘management ideas’or ‘management techniques’also

were natural concepts.

This paper explores that blind spotfrom a design theory

perspective: what canwe learn about the invention phase

of management innovation if we consider the output of

the management innovation process –management ideas,

techniques, t ools –as managerial objects resulting froma

design activity?

Because this is exploratory research, we will use a

single case study methodology. We choose Peter

Drucker’s management by objectives and self-control as

a reference case. MBO was designed with the ambition

of being a whole system of management and not a simple

technique, which makes it a broad range case, with a

chance to address the fundamentals of management and,

consequently, the opportunity to point out significant

breakthroughs with respect to established management

practice.

We first detail what the academic literature on

management innovation says about the invention phase.

Second, we present the design paradigm as it appears in

management research and we introduce the key elements

of literature on formal design theory. Third, we tell how

Peter Drucker and Harold Smiddy came to invent

management by objectives and self-control in the 1950s.

Fourth, we use formal design theory concepts to analyze

how the concept of MBO was generated. We identify

key breakthroughs with respect to established

management ideas and practices. We detect what earlier

breakthroughs were necessary, so including the invention

of MBO within the historical evolution of management

concepts. Fifth, we discuss the conceptual genealogy

obtained and con clude on how a design the ory perspective

on management innovation could be generalized, how it

could improve the way we tell the history ofmanagement

thought and practice and how we could better conceive

and steer future management innovation processes.

Literature review

Models of the invention phase of management innovation

Invention startswhen the first ideas emerge. At thatstage,

there might be no theorizing, the new idea might not yet

be coined with a label. It is uncertain if it will succeed in

becoming a well-formalized management principle or

technique and if it will be considered as a management

innovation. The idea is known by a small number of

internal or external change agents.

Birkinshaw et al. (2008) analyze what the invention

phase should be. Their conceptual framework allows a

precise description of the kind of actors –internal and

external –and cognitive activities –problem driven

search, trial and error, idea contextualizing, idea refining

and idea linking –that take place and interact in the

invention process. The invention phase itself is part of a

larger process: motivation, invention, implementation,

theorization and labeling.

As their framework suggests, it is not always easy to

separate the invention phase from the motivation phase –

the phase that precedes invention –or the implementation

phase –the phase that follows invention. At the

motivation phase, internal and/or external agents begin

to realize that their current management practices might

be inadequate. One necessary condition for motivation

to evolve to invention is that problems really come from

limitationsof management techniques in use and not from

‘a failure to execute under existing arrangements’

(Birkinshaw et al., 2008, p. 833). Of course, internal

change agents could also be misled by the ‘management

fashion-setting community’(Birkinshaw et al., 2008, p.

833; see also Abrahamson, 1996), resulting in irrational

384 A. David

©2018 European Academy of Management