Many are criticizing Samsung’s response time in recalling the Galaxy Note 7. Could the organizational structure of Samsung have affected how quickly they decided to terminate the product?
A new study led by Merage School Professor John Joseph looks at the effects of organizational structure and performance feedback on product phase out, specifically in the mobile device industry.
The study, titled, “Organizational Structure and Performance Feedback: Centralization, Aspirations, and Termination Decisions” was accepted at Organization Science and examines what drives product culling and where the decision making should take place within a company.
Results from the study indicate termination decisions should be vested with senior level management to speed responsiveness, particularly in industries where responsiveness is important like those with high levels of technology innovation, short product life cycles or rapid obsolescence.
Read more in Professor Joseph’s article, “Centralized Decision-Making Helps Kill Bad Products,” published in HBR Online.