The Dynamics and Functions of Self-Organization in the Fuzzy Front End: Empirical Evidence from the Austrian Semiconductor Industry

This paper studies the functions, impacts and dynamics of self-organization in the fuzzy front end of innovation. Based on a case study approach, the new product development processes of five Austrian semiconductor companies are analysed. We adopt a complexity science perspective which stresses that self-organization and emergence are key elements of the new product development process. We found that self-organization mechanisms occur in two ways. First, self-organizational activities support formal and top-down managed new product development processes. In this way, they contribute to the acceleration and adaptation of the new product development process and are also a way to overcome bureaucratic structures. Second, we found evidence for the existence of purely emergent bottom-up processes in many cases. In this context, employees intrinsically and without any explicit order or strategy took initiatives to innovate. Such activities run in parallel to or precede formal new product development processes and employees deliberately bypass and even ignore formal processes such as financial incentive systems, suggestion schemes and patenting rules in order to promote their ideas. These activities are often secret until they are mature enough to be presented to the management, when they are then, if evaluated positively, incorporated as official projects in the new product development process.