The Impact of the Covid‐19 Pandemic on Firms’ Organizational Designs

In this commentary I examine the potential impact of the Covid‐19 pandemic on firms’ organization designs and speculate on how the pandemic may influence organization design research. By organizational design, I mean an organization’s optimal levels of differentiation and integration given relevant internal and external contingencies.[1] In this regard, a key distinction is between the short‐run, that is, the situation in the aftermath of the decision by a large number of countries, international associations, and other agencies that the health crisis was a pandemic that required drastic measures (i.e., approximately mid‐March 2020), and the long run in which the disease is better understood and handled (effectively, two to three years from now). The temporal frame is likely to crucially matter to the effect of the pandemic on firms’ organization designs. The long run may mean everything from a complete reversal to the pre‐pandemic situation to a more or less permanent situation of sporadic outbreaks and lock‐downs that require more social distancing. Whichever scenario manifests will have important implications for organization design. However, even with a relatively quick reversal to pre‐pandemic trading and interaction patterns, there are likely to be permanent traces left on organization design. For organization design scholars the pandemic presents not only a unique test‐bed for examining existing principles of organizational design but might also stimulate new theory related to the temporal dimension of organization design and the influence of path‐dependence. Thus, reflecting on the pandemic suggests that major external contingencies have different short‐term as compared to long‐term effects on organizational design, but also that major disturbances are likely to leave ‘permanent’ traces on the design of organizations – notions that seem absent from extant organization design research.