Designing the microstructure of routines

On the one hand, the inability to specify a clear and stable formal structure of tasks and roles implies that coordination depends more on informal structure. Informal structure can be harnessed by employing broad design variables such as decentralization of decision-making authority (Mintzberg and Waters 1985), tuning how much agents “explore” different decisions or actions (Levinthal and Warglien 1999) or incentivizing rich communication (Galbraith 1974). The microstructural perspective emphasizes, however, that interdependencies between dimensions such as tasks and roles may neither require formal nor informal coordination of tasks and roles. Many interdependencies among tasks and roles may be epistemic, meaning that they exist in an abstract sense, but do not necessarily depend on explicit coordinating actions for their performance (Puranam et al. 2012). The implication is that formal structures of tasks and roles can be substituted for not just by informal structure, but by formal structures regarding activities that are not tied to detailed assumptions about these tasks and roles.

Given that the firm cannot sufficiently decompose tasks and roles in advance, effectively designing routines instead can draw on more abstract solutions to integrate effort based on generally providing information to agents about their routine activities. By developing solutions for providing information regarding routine activities, the firm may enable coordination to emerge effectively even without much a priori specification of tasks and roles. Imposing even simple shared “maps,” for example, can serve as a basis for information provision by inducing effective self-organizing dynamics among agents (Levinthal and Warglien 1999; Puranam and Swamy 2016).

Recent advances in modeling intelligent systems (e.g., Hewitt 2013) have developed theories of coordination that do away with a priori assumptions about tasks and roles in favor of abstract formal structures for information provision. Work in this area has centered on the concept of concurrency to characterize the core challenge of providing information for coordinating activities. We argue that this concept of concurrency can serve as a basis for theorizing the design of microstructural solutions to information provision for coordinating routines.

Concurrency refers to the simultaneous coordination of diverse activities of indeterminate order (Hewitt 2010). Concurrency should be distinguished from simply performing tasks or activities in parallel. “Simultaneous coordination” refers to the possibility that agents need to be ready to perform a diverse set of tasks and activities at any particular time. “Indeterminate order” refers to the fact that tasks and activities can play out differently each time that they are performed. Likewise, routine activities comprise patterns of action that have a characteristic, but ultimately indeterminate rhythm and rhyme (Pentland et al. 2017). Routine activities may be overlapping and asynchronous and depend on embodied actions by agents working together in a shared space (Lebaron et al. 2016). Information provision may concern commitments to perform a task right away (i.e., nurses and physicians treating a patient in an ICU), or concern understandings that may become relevant only later (i.e., nurses and physicians referring to the ICU records in monitoring the same patient throughout an extended hospital stay). Concurrency captures the coordination challenges of this indeterminacy in task type and task order that arise from the situated, performative nature of routine activities.

In the systems design literature, solutions to support concurrency in coordination are based on rules for actors to provide information to one another in the form of exchanging understandings and commitments (Hewitt 1988). The idea is that, as actors provide information to one another about their activities, they can effectively compose routine activities without any a priori decomposition of tasks and roles. This idea has been stylized in this literature through a baseline example of an organization’s email system. An organization’s email system typically requires no assumptions about how tasks or roles are allocated. It requires only minimal rules about the actions underlying information provision itself—actors can create, send, and receive email messages of any content for exchanging understandings and commitments. Any actor with an address can send a message to any other actor in the organization who has an address, while the receiver can designate how they receive the message (e.g., respond, delete, place in spam, block). The order in which messages are received need not be the same order in which responses are given; some messages may be relevant immediately, while others may require a response only at a later date.

In the systems design literature, these basic actions underlying activities are referred to as “message passing” (Hewitt 2010). Drawing on this metaphor, we consider solutions to information provision in the context of organizational design as a set of rules for passing messages intended to enable agents to exchange understandings and commitments necessary for coordinating their routine activities.

In models of concurrency from the systems design literature, the indeterminate order and multiple temporal scales of routine activities create a tradeoff in solutions to information provision. The central issue is the extent to which the messages that agents create and send should be tied to fixed sequences of activities within a routine (i.e., standard operating procedures) (Hoare 1978), or whether agents should be allowed to send messages about anything they deem relevant (Hewitt 2010). Passing messages regarding fixed sequences of activities may impose coordination costs by requiring the fixed sequence to be synchronized with other messages or completed before another message can be passed. On the other hand, allowing agents to send any sort of messages may fail to harness inherently fixed sequences in activities.

This tradeoff in the use of fixed sequences in how messages are passed has been central to models of concurrency in contexts ranging from computer operating systems, the internet, scientific communities, and office work. We argue that this tradeoff similarly should apply to how organizations provide agents with information regarding their routine activities. To understand how the role of fixed sequences in providing information affects the coordination of routine activities in the context of organizations, we next analyze field data gathered on the routines of two Korean restaurants.

We collected the data for this study through observational fieldwork and semi-structured interviews at a highly standardized chain restaurant (and its parent company headquarters) in central Seoul, and at a highly idiosyncratic independent restaurant in a rural area of Korea. Our data collection strategy was to sample from the “extremes” of our phenomenon of interest (coordinating routines in restaurants) to generate robust, if exploratory, theory regarding the design of routines. Field observation and interviews in Korean and English were conducted by both of the authors. Many studies of routines have drawn on ethnographic and ethnomethodological methods to generate thick descriptions of how people collectively enact and interpret routines (e.g., Lebaron et al. 2016). For our purposes of theorizing the design of routines, we focused more narrowly on observing how agents provided information to one another in coordinating their activities. Our data collection strategy was closer to a process engineering approach (see an analogous methodological distinction in Pentland (2013)), in which we were interested in observing what could be abstracted out from agents’ enactments and interpretations to serve as a formal basis for design. We next briefly describe the two restaurants that served as our research settings, and the basis for their comparison.

Our analytical process began by open coding and memoing of the data to generate themes about how agents in the two restaurants provided information to one another to coordinate their routine activities. We developed a view that both the solutions and sources of coordination challenges in the restaurants importantly concerned the distinct ways in which agents provided information to one another regarding their activities. We iterated between coding and memos to generate themes in regard to the role of information provision our settings. In examining the organizational design literature, we found that the emerging micro-structural perspectives on design (Puranam 2018) fit well with what we had observed in regard to the critical role of information provision in both restaurants in aggregating action without a priori task structures. Drawing on the constant comparative method (Glaser and Strauss, 1967), we then zeroed in on the two restaurants’ distinct solutions to information provision for addressing challenges of concurrency in coordinating routines. The chain provided information tied to fixed sequences of activities, while the independent restaurant provided information regarding any relevant aspects of routines without being tied to sequences. We found that these distinct solutions mapped closely to two perspectives in the systems design literature on addressing challenges of concurrency (Hoare 1978; Hewitt 2010). Drawing on this literature, we brought the restaurants’ solutions to information provision within the domain of organizational design by framing their distinct solutions as a strategic choice for designing the microstructure of routines.

Next, we describe our findings, which layout in greater detail the solutions to information provision that the two restaurants developed for providing information to address challenges of concurrency in coordinating their routine activities.

In the chain restaurant, agents provided information to one another in the form of orders for performing fixed sequences of activities tied to standard operating procedures or checklists. Routines were composed of sets of sequences of activities. Limits to coordinating routines arose from the need to assume uniform outcomes, and as the details in checklists and standard operating procedures constrained control over uniformity.

In the independent restaurant, the cooks and waitstaff expressed their belief that standard operating procedures or checklists would impede their ability to coordinate routine activities efficiently and effectively. Agents used various forms of memos (handwritten notes, labels, social media messages) to provide information about the status of a particular activity. Agents distinctly used face-to-face communication to coordinate based on continually reconfiguring the physical space in which a particular activity was performed.

In both restaurants, we found that conventional divisions of tasks and roles were insufficient for concurrently coordinating activities underlying routines. To address the challenges of simultaneously coordinating diverse activities of indeterminate order characteristic of routines, the restaurants depended on solutions to information provision.

Next, we develop a normative framework that highlights the strategic tradeoffs of both solutions to supporting concurrency in coordinating routine activities. In the chain restaurant, agents provided information to one another regarding fixed sequences of activities captured in standard operating procedures and checklists. Since the chain restaurant’s solutions to information provision regarding fixed sequences depended on uniform outcomes and task environments, we identify such solutions as a uniformity strategy. In the independent restaurant, agents provided information primarily as memos and face-to-face communication regarding particular performances of activities. Since the independent restaurant’s solutions to information provision depended on outcomes and task environments merely compatible with particular performances of routines, we identify such solutions as a compatibility strategy.

A debate arose among healthcare practitioners a few years back regarding a proposal for reforming the US healthcare sector to improve innovation and quality control. The proposal was that the healthcare sector should be re-organized to be more like the Cheesecake Factory—a casual restaurant chain known for reliably producing a large variety of dishes based on standard operating procedures and checklists (Gawande 2012). Critics of the “Cheesecake Factory proposal” responded that the context-specific (i.e., situated, performative) aspects of diagnosing individual patients would make a standardized approach to organizing the health care sector ineffective. They argued that the sector should be organized into networks of clinics, with each clinic treating patients according to their particular criteria while idiosyncratic information would be integrated into the network for collective learning. The Cheesecake Factory proposal assumes that coordination— whether of casual dining dishes or medical procedures—can be controlled based on information regarding fixed sequences of activities (i.e., standard operating procedures captured in artifacts such as standard operating procedures and checklists). The “networks of clinics” approach assumes continually evolving information regarding the treatment of a clinics’ particular patients.

The debate points to a central challenge that firms face—whether in restaurants, healthcare, or another sector—of how to standardize information provision for coordinating routines across diverse situations. Yet, discussion of this challenge of situatedness in coordinating routines has been largely missing in the strategy literature on organizational design. As noted before, we have had few theories of the design of routines. Meanwhile, in the strategy literature on routines, the overwhelming emphasis has been on the replication of highly standardized processes akin to those of the Cheesecake Factory (e.g., strategies for transferring knowledge about standardized processes in business format chains, or Intel’s “Copy Exactly” strategy for replicating semiconductor fabrication plants). These strategies are premised on the extensive codification of processes underlying routines (Winter and Szulanski 2001). Changes to firm-level codifications (i.e., deviating from the firm’s manual) by agents are found to lead to lower firm performance (Jensen and Szulanski 2007). This research reflects a broader understanding in the strategy literature on firm capabilities that effectively coordinating routines depends on extensive firm-level codification of processes (Zollo and Winter 2002).

Our paper reframes the role of extensive codification in coordinating routines from an organizational design perspective. Extensive codification relates to a strategy of providing information regarding fixed sequences of activities for coordinating activities concurrently that can easily inflate coordination costs and limit possible outcomes. Relying on fixed sequences can be the enemy of effectiveness in that the need for concurrency in how these fixed sequences are composed can place an enormous burden in synchronizing information provision (Hewitt 1988; Hewitt 2010).

The implication of our reframing of the role of codification in coordinating routines is that firms should be careful in adopting a uniformity strategy à la the Cheesecake Factory. Extensive codification required in a uniformity strategy should be used only where outcomes and task environments are inherently and unavoidably uniform. In certain organizational contexts (e.g., business format chains, Intel’s fabrication plants), such conditions may predominate. In most contexts, however, we argue that firms can benefit by identifying routines for which coordination can be effectively induced with a compatibility strategy. Future work could operationalize and empirically test variation in companies’ use of uniformity versus compatibility strategies (i.e., by relating routine activities to the presence and use of standard operating procedures and checklists) on variables such as coordination costs and tolerance for diversity in activities.

Firms increasingly coordinate activities beyond their traditional boundaries, where agents are mostly autonomous rather than internal employees (Benner and Tushman 2015). Organizational design scholars and practitioners have made sense of the implications of blurring boundaries in a number of ways. Under a relatively macro-level design lens, scholars find that blurring boundaries offers novel opportunities for creating and capturing value based on the design of business models, platforms, and ecosystems. Extant microstructural perspectives have explored how blurring boundaries have also been characterized by novel solutions to providing rewards, such as crowdsourcing, online communities, and the blockchain. Little has been said, however, regarding the implications of a shift towards coordination beyond traditional firm boundaries for our understanding of the fundamental issue of how firms coordinate routines.

The theory and framework developed in this paper can inform future work on the relationship between routines and firm boundaries by focusing on how blurring boundaries shape the nature and effectiveness of a firm’s solutions for providing information. Consider firms that depend on coordinating the routine activities of agents who are not employees (e.g., GitHub’s coordination of the collaborative coding activities of independent teams of developers with its open-source software repository). Coordination in these firms should be characterized by the compatibility strategy that we identified, based on providing information according to evolving situations underlying particular agents’ routines (e.g., GitHub’s version control system that provides relevant information on the state of a software project at a particular time). In our study, we examined such a strategy within a single restaurant. Future work could extend our characterization of the compatibility strategy in the restaurant to cases such as GitHub that involve large numbers of agents. The basic research questions would be to seek to understand how firms can use solutions to information provision to coordinate routine activities beyond their boundaries at scale.

Future work could integrate assumptions from theories of concurrency (e.g., Hewitt et al., 1973; Hoare, 1978; Hewitt, 2010; Pike 2015) into extant models of landscape design to model the design of the adaptive dynamics of routines. Processes of firm adaptation have been an area of substantial interest for strategy and organizational design scholars (e.g., Levinthal and Warglien 1999). Research on firm adaptation has developed insights into both routines (e.g., Nelson and Winter 1982; Winter and Szulanski 2002; Salvato and Rerup 2011) and organizational design (e.g., Rivkin and Siggelkow 2003). At the same time, theories of routines and theories of design in the literature on firm adaptation have been only loosely connected. Research on design and firm adaptation —e.g., landscape design—has primarily been understood in terms of choices for tuning the level of exploration and exploitation among a population of self-organizing agents (e.g., Levinthal and Warglien 1999).

The strategic choices that landscape design research has examined can be usefully extended to account for routine activities by drawing on the compatibility strategy identified in this paper. In the compatibility strategy, a difference in coordinating adaptive dynamics of routines is that information provision is compositional. That is, information is provided in regard to particular performances, rather than decomposed from a given set of tasks, components, or policies. This characteristic of the design of routines suggests that solutions can be developed incrementally, without extensive a priori codification of fixed sequences of activities, and therefore with less risk of path dependencies. This characteristic of incremental composition with less risk of path dependence is suggestive of research on neutral landscapes, or landscapes in which variation can often proceed without selection effects (Fontana 2008; Jain and Kogut 2013). We suggest that future work could also use our theory and framework to develop models of neutral landscapes for adapting to the novel challenge of concurrency in the coordination of routine activities.