Introduction

This article presents a model of different types of work and their relationship with the entrepreneur, as a means of disentangling and understanding one part of the firm’s bundle of resources and capabilities. The entrepreneur’s capacity to identify market opportunities is linked to experience and hence to the internal conditions of the firm where that experience has been acquired. However the interpretation of internal conditions and how they affect the formation of experience also depends on the tools used for analysis.

In this sense, some models of analysis, such as the value chain proposed by Porter (1985) or the hierarchy of capabilities put forward by Grant (1995: 131) have a strictly internal orientation, although sooner or later the firm’s management has to establish relationships between its resources and capabilities and its external strategic decisions. When these relationships are very close and are based upon the organization’s internal development, to a large extent, entrepreneurial action becomes cooperate entrepreneurship (CE): an entrepreneurial activity that, without undermining the importance of initiatives from the CEO or top level management, is founded on different collective actions.

The following are activities related to CE: management as a group of managers who cooperate in decision-making (Hambrick and Mason 1984; Hambrick 2007); entrepreneurship as the result of a group of people who cooperate to enable learning and innovation (Hayton 2004, 2005, 2006); the capacity to discover or create opportunities on the part of the entrepreneur and the capacity to exploit these opportunities to good effect, which is based on networks of social and institutional capital, created by the manager, within the firm and within general and specific environments (Lounsbury and Glynn 2001; Audretsch and Monsen 2008); and the activity of organizational renewal, which allows the continuous improvement of organizational and technical marginal innovation (Hayton 2005; Zotto and Gustafsson 2008).

Within this framework, the model of types of work we propose and its relationship with work design enables CE activity. Simple types of work, in which the worker uses unsophisticated skills and scant explicit knowledge, and in which tasks are characterized by an absence of exceptions or changes will require a particular use of centralization and empowerment, and of the formalization of flexibility as the main design variables of work. They also require particular human resource practices; while complex types of work, with sophisticated skills and/or a high degree of explicit knowledge with frequent exceptions and changes will require different uses of the levels of centralization, empowerment and formalization (Perrow 1967, 1970; Peris-Ortiz 2005) and different human resource policies and practices (Schuler and MacMillan 1984; Schuler and Jackson 1987; Baron and Kreps 1999).

Section two of the article deals with the model of types of work. In this section, we discuss the different types of work and their varying forms of management. Section three, which looks at a variety of theoretical approaches, provides instruments for the management of CE. Section four presents a model for enabling CE and, finally, a synthetic form of the model is presented in the conclusions.

An analytical model of types of work for human resource management

In order for the entrepreneur to be able to obtain the participation and involvement of the different levels of managers and workers, in such way that it leads to cooperation and organizational renewal, thereby enabling CE, knowledge of the characteristics of different types of work is useful.

Characteristics of work

The characteristics of work are partly derived from the actions and influence of the management, along with the environment and the tasks the organization has to carry out. The management intervenes by selecting the type of environment (sector, market segment) in which the firm is competing, and widely intervenes in the way in which work is organized and managed (job design, human resource policies and practices). However, once the environment is chosen, this has a relevant effect on work. The type of products and/or services that the firm must provide and the characteristics of the materials that must be transformed (from coal and iron in a furnace to minds in a psychiatric clinic), condition the demands on work and make its nature or characteristics the result of the permanent crossover between the previously chosen environment and the management, which continuous intervenes and exerts its influence.

Each of the types of work derived from these environmental and managerial influences present either high or low levels of exceptions and change, and high or low levels of skill and knowledge, and this requires different forms of management and design in order to obtain efficient management. All these factors become further intensified if, besides efficiency, the aim is to obtain continuous renewal and organizational innovation as a form of CE.

The classic model provided by Perrow (1967) on types of technology and certain contributions to organizational theory from sociology along with transaction cost theory (Ouchi 1979, 1980) or the organizational agency theory (Fama and Jensen 1983a, b), allow us to take a deeper look at these questions and lay the path towards a form of work management that enables CE.

A model of types of work

A number of classical contributions to the study of organizations pay special attention to the characteristics of work and to how they influence the organization. Of particular note are the following contributions: Perrow (1967, 1970) from the area of sociology; Ouchi (1979, 1980) also from a sociological perspective and a transaction cost theory perspective; the classic study by Alchian and Demsetz (1972), from the area of the economy of organizations; Fama and Jensen (1983a, b) and Jensen and Meckling (1992), from the perspective of organizational agency theory: Barney and Wright (1998), from the area of theories on resources and capabilities and human resources and, indirectly, the contribution from Winter (Zollo and Winter 2002; Winter 2003) from the perspective of routines and capabilities.Footnote 1 We will now go on to look at Perrow’s proposal (1967, 1970) on a model of types of work and in the following sections, we examine the contributions of Ouchi (1979, 1980), Alchian and Demsetz (1972) and Fama and Jensen (1983a, b), contributions that complete the model of types of work and contribute to the management of CE.

Perrow (1967) proposes four types of technology, according, on the one hand, to whether the activities involved are subject or not to relevant exceptions and changes and on the other, to the level of difficulty in the process of finding a solution to those exceptions. If few exceptions exist, and those that do exist can be addressed on a logical and analytical basis by applying known programs or procedures, it means that we are dealing with routine technology which then corresponds to a routine type of work —few exceptions and changes— requiring a low level of skill. If there are numerous exceptions and these cannot be solved by known logical processes or programs, we are then faced with non-routine technology, which corresponds to work that entails frequent exceptions and is highly skilled or creative. In the former case, there is scarce cognitive complexity and problems are solved via known search processes. In the latter, there is a high level of cognitive complexity and there is difficulty in finding (knowing) a logical process that allows us to deal with the exception

Between the two extremes mentioned above, if there are few exceptions but those that exist can be addressed using known logic processes or programs, for Perrow (1967), this corresponds to the technology of the craft industries where work has relevant skills. If many exceptions exist but they can be addressed via logic or known programs, for Perrow, this corresponds to the technology of engineering in which work that is adapted to different exceptions does not present problems for its knowledge and control. In these two intermediate technologies, we can broaden the Perrow’s vision. Few exceptions, but those that are hard to analyze when they do occur, are related to medium-high or highly skilled work; and many exceptions, but which do not entail any great degree of difficulty of analysis are included in a variety of types of work that are medium to low-skilled, many of which are related to work in sales and direct contact with the public.

Within this framework, and in accordance with the points above, Perrow (1970: 36) lays down, on the one hand, the importance of managerial vision:

“In order to understand these differences (between the same types of organizations) it is important to find out how an organization (fundamentally the top management) conceives its tasks and its raw materials”.Footnote 2

On the other, he clearly underlines the proximity between types of technology and the types of work that we propose in Fig. 1, taken from his definition of types of technology (Perrow 1967: 195):

Fig. 1
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Model of types of work

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“By technology is meant the actions that an individual performs upon an object, with or without the aid of tools or mechanical devices, in order to make some change in that object. The object, or « raw materials », may be a living being, human or otherwise, a symbol or an inanimate (or material) object”.Footnote 3

As an aid to understanding the complexity of different types of work as a result of incorporated knowledge and exceptions that need to be resolved, Fig. 2 shows the order of complexity. L1 is routine, repetitive work that incorporates non-relevant skills and knowledge and has few exceptions to the work carried out. L2 involves relevant exceptions and changes but does not incorporate relevant skills or knowledge and the processes in place for solving these exceptions are both simple and well-known. L3 incorporates relevant skills and/or knowledge and has few exceptions, though when these occur, there are no readily available simple search processes for solving them. L4 incorporates relevant, highly skilled and/or creative knowledge and incurs many exceptions, without the existence of known search programs or processes for solving them.

Fig. 2
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Order of complexity of work

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Examples for L1, L2, L3 and L4 in the world of production or services, amongst a plethora of possibilities: hotel waiters (L1); second-hand car salesman (L2); engineers in a factory or specialists in cardiology at a hospital (L3); and basic R+D work at a high-tech firm, a designer for a top fashion company or upper management posts in any large production or service firm (L4). Figure 1 shows the position of each type of work in relation to the level of incorporated knowledge, and to the exceptions and changes; Fig. 2 expresses the order of complexity of the work.

Efficient management for different types of work. The fundamental variables

With regard to the management of different types of work, this section is designed under the premise that, generally, simple types of work can efficiently engage with simple, centralized forms of coordination and control; whilst the efficient management of complex work requires more sophisticated, decentralized forms of coordination and autonomous control (Perrow 1970) or social control (Ouchi 1979, 1980).

Starting with the simplest type of work, L1 is the kind of work that involves skills or knowledge that are not particularly relevant, and uses simple search processes to solve them; therefore, plans and programs related to this type of work are created at the upper echelons of the hierarchy, without employee participation, nor the need to delegate to the worker in terms of decision-making. Figure 3, the OABC quadrant, shows that this type of situation corresponds to high levels of centralization (C) and formalization (F).

Fig. 3
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Administration of different types of work

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With regard to human resource policies and practices, functional policies (Pf) aimed at personnel selection and training are, in this case, simple and adapted to the requirements of the job in question (Pf– value, adjacent to the OABC quadrant, Fig. 3); while complementary policies (Pc) aimed at employee assessment, rewards and socialization, are applied with a medium-low level of intensity. Measurement does not entail any great deal of difficulty and socialization, always a desirable asset, is not a priority here, given the high levels of centralization and formalization assured by the amount of coordination and control. Figure 3 shows the low role of Pc through the Pc– notation, next to quadrant OABC.

With regard to L2, with non-relevant skills and knowledge, the greater number of exceptions involved in this work has simple search programs and processes to deal with them by applying plans and programs created at higher levels in the hierarchy, without employee participation. However, in this case, there may be authorization for decision-making within specific tasks. Figure 3, quadrant OGHA, shows this situation with a high level of C, although at a lower level than for L1. With regard to F, the greater number of exceptions reduces F where adaptation becomes necessary.

Functional human resource policies, as in the previous case, are simple and adapted to the needs of the job, although here, a greater level of training is needed so that the worker can deal with the various exceptions that arise (Pf± notation, adjacent to quadrant OGHA, Fig. 3); which will consequently lead to the incorporation of more skills and knowledge and, to a certain extent, to greater development and complexity of complementary human resource policies (Pc± notation, adjacent to the OGHA quadrant, Fig. 3). These complementary policies, if authority for decision-making during tasks is delegated to employees, apart from measurement and rewards, they should ensure an adequate diffusion of objectives as a means of orienting behaviour; and if the margin of employee discretion makes it convenient, complementary policies can be developed aimed at socialization.

With regard to L3, this type of work involves relevant skills and/or knowledge, and incurs few exceptions, the solutions to which imply search processes that are difficult to discover and interpret. It may be desirable for those doing an L3 type of job, mostly of a professional nature, to participate in the planning that concerns them, as well as drawing up a schedule for their own work, and a typical characteristic of professional work is that the power to make decisions is delegated to the employee for that area of activity. Consequently, and as Fig. 3 shows, quadrant OCDE shows work that is decentralized. On the other hand, the low number of exceptions, typical of professional work, depends upon the particular protocol of the profession and the rules of the organization, allowing medium or high levels of formalization.

Functional human resource policies are characterized here by a medium level of complexity, and should take into account the future needs of professionals in terms of training (Pf± notation, adjacent to quadrant OCDE, Fig. 3). With regard to complementary policies, if the professional work involves a medium level of skill, and is subject to protocol and long established rules, its management tends to be fairly simple, despite the problems that the exceptions may pose. If these professionals are more highly skilled, with more relevant exceptions and outputs that accumulate intangibles that are hard to measure, as occurs frequently in certain management jobs or in services, political institutions that enable socialization should be added to protocol and regulations (Pc± in Fig. 3, quadrant OCDE).

In terms of L4, this type of work involves high levels of knowledge and creativity and faces multiple and frequent exceptions, without the assistance of known search programs or processes. If the job in question is high level managerial, it entails designing the strategy and plans of the organization and this figure has decision-making powers with institutional limitations that are characteristic of top management (Fama and Jensen 1983a, b). If the job entails specialized knowledge and is the highest skilled in that area of the firm, this figure will take part in the planning and programming of his or her own work and has the ,power to make decisions. It is, therefore, work with low levels of C and F, as shown in Fig. 3 (quadrant OEFG).

The level of skill inherent in L4 clearly includes the capacity for search processes that allow exceptions to be resolved in different specialities such as in top management posts. Human resource functional policies are of the highest level of complexity, independent of whether such posts are reached through training and internal promotion or if these posts are filled by a recruitment and selection process and/or through external cooperation (Pf+ notation, adjacent to quadrant OEFG, Fig. 3). With regard to complementary policies, L4 is the most problematic type of work for assessing and assigning rewards, which makes the existence of complementary policies that create a suitable institutional framework important, thereby enabling socialization (Pc+ notation, adjacent to quadrant OEFG, Fig. 3).

Efficient management and CE

If an entrepreneur’s capabilities are linked to experience in the firm and to the way in which the entrepreneur depends on different collective actions, knowledge of work characteristics (incorporated skills and knowledge, exceptions and changes) is essential for knowing how to manage the relationships with different employees. In the same sense, once the characteristics of work are known, the application of studied design variables will be essential (centralization, formalization and functional and complementary human resource policies). Sound work design enables a reward system and commitment (Jensen 1998: Chap. 11), at the same time as establishing technical and social conditions that allow cooperation, learning and innovation in the organization (Schuler and MacMillan 1984; Schuler and Jackson 1987; Baron and Kreps 1999). CE thus finds fertile ground for organizational renewal (Zotto and Gustafsson 2008), and the discovery and creation of opportunities (Hayton 2005).

However, the interpretation of work characteristics and how they should be managed depends on the theoretical approach and the tools used for analysis. Different authors have varying visions of work design, its forms of coordination and control, and a reward system for obtaining commitment and Perrow (1967, 1970), Alchian and Demsetz (1972), Ouchi (1979, 1980) or Fama and Jensen (1983a, b). Therefore, the question is, what approach or mix of approaches should the corporate entrepreneur adopt to enable organizational and technical innovation or, put differently, in terms of the model proposed, what interpretation should we give to the characteristics of work and what should its contents be and how should C, F, Pf and Pc be applied to enable CE?

We will now go on to examine how the authors mentioned above consider the aspects of authorization and initiative, so that employees can contribute to renewal and organizational innovation, and how they combine decentralization with the necessary forms of control that guarantee an orientation towards the firm’s objectives.

Perrow (1967, 1970)

With regard to initiative, Perrow presents routine and engineering technologies as centralized forms of organization. Upper hierarchical directives establish objectives and program the activities of types of L1 and L2, although we have indicated that there may be delegation of authority and initiative to take decisions related to a particular task, as in the case of L2. In terms of control, the low or medium-low complexity of this type of work does not imply any great difficulties of analysis, and hence problems of measurement and assessment can be overcome.

When dealing with the craft industries, which we have associated with L3, i.e. work that involves professional skills or knowledge or L4, non-routine technology that involves highly skilled and/or creative work, Perrow here attributes participation and initiative to professionals in establishing objectives and, according to L3 or L4, initiative in the choice of the necessary means to adapt to the plan, or initiative in the formation of the plan. In terms of control, the skills and/or knowledge involved in L3 (medium-high or high complexity), or the high level of knowledge incorporated into L4, along with the exceptions that need to be resolved (high complexity), can pose problems of analysis and control of skilled work.

Figure 4 shows the relationship between authorization and initiative and control, for the L1, L2, L3 and L4 types of work. In the case of L4, the figure shows two subtypes: L4′, when we can achieve an approximation to a satisfactory degree of control; and L4′′, for cases where sufficient control is not possible. For Perrow (1970: 61), the association of skilled work (of employees or managers) with higher levels of commitment, introduces self-control; and this aspect is reinforced by an organizational context that favours authorization, initiative and participation (Pc) (Perrow 1970: 37–45), leading to types of work that are located above segment AB (L1, L2, L3, L4′, Fig. 4).

Fig. 4
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Initiative and control of canonical types of work Initiative

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In this way, the centralization of L2 and the natural tendency of L3 and L4 towards greater commitment to the firm, plus the influence of the organizational context and the complementary policies that favour greater worker integration (Fig. 3, Pc+ y Pc±), establish the right conditions so that initiatives for achieving objectives and the plan/initiatives and the necessary means contribute to CE.

Alchian and Demsetz (1972)

In the classic study by Alchian and Demsetz, the fundamental question addressed is whether work can be measured, although this implies difficulties and costs, or whether the work in question means that measurement will be too incomplete. In the first case, operative work similar to that comprising L1 or L2, authorization, initiative and control is in the hands of supervisors and the hierarchy (and thus in the hands of the managerial work referred to in L3 or L4); in the second case, which refers to professional or creative work, initiative and control are in the hands of the professionals (L3) or creative workers (L4), whose incentives will have been designed through institutional policies (Pc).

With regard to a sound reward system, for work that has similar characteristics to L1 and L2, rewards should be measured and adjusted according to performance, so that, as Alchian and Demsetz point out, the more productive ones receive more and the less productive ones receive less. With regard to the L3 or L4 types of work, given that the observation of behaviour does not allow sufficient knowledge of productivity (Alchian and Demsetz 1972: 786), rewards should be systemized through the institutional forms of profit share firms or partnership firms. Thus, by assigning profits or ownership rights, Alchian and Demsetz make the cooperation and commitment of skilled workers (types L3 and L4) both easier and likelier.

For Alchian and Demsetz, L3 and L4 in Fig. 4 correspond to subtype L4′′, for which control is not satisfactory unless a correct reward system can be found. Rewards of an explicit, economic nature, according to the productivity of L1 and L2, or profit sharing for L3 and L4, form the group of incentives that are completed by assigning the remaining profits to the owner or top level manager. The extent to which reward systems are correctly implemented through measurement (control of a technical nature) or through an institutional framework (control of a social nature), establishes the conditions (Pc+, Pc±) under which initiatives from different members of the organization can contribute to CE.

Ouchi (1979, 1980)

Essential coincidences exist between Ouchi (1979, 1980) and contributions made by Perrow (1967, 1970) or Alchian and Demsetz (1972), despite the important differences in the way they conceive the organization. For all these authors, the characteristics of technology and work are a key factor that conditions organizational efficiency and forms of coordination and control. Hence, Ouchi (1979: 843–844) shares Perrow’s idea that the incorporation of knowledge into technology or the production process conditions the capacity to understand the process or the work in question. If the process goes further than our understanding or control capacity because there is no established referential procedure or because multiple exceptions have to be addressed (as happens with the CEO of a fashion shop), there is the alternative of output control.

If neither control of the process and behaviour is not a possibility and nor is output control, forms of institutional control become necessary. Such is the case put by Ouchi (1979, 1980), with a different proposal from that of Alchian and Demsetz, through common traditions that allow a high level of socialization and enable the existence of common values and objectives. Traditions can obviously not be improvised, but if difficulties in understanding technology lead to important limitation in processes and output, from Ouchi’s perspective, socialization is the sole possible form of control.

In order to reach a sufficient level of socialization, the management should carry out a process of selection and training of personnel (Pf+ y Pf±, Fig. 3) that enable personal interest and the objectives of the organization to converge (Ouchi and Maguire 1975); it should also establish relationships of equality within the organization that allows its members to comply with Gouldner’s “standard of reciprocity” (Pc± y Pc+, Fig. 3) (Ouchi 1980: 130); and should have a coherent framework of ideas on what the firm actually is and what its fundamental proposal is, spreading information on its main objectives within this framework (Pc±, Pc+, Fig. 3) (Ouchi and Price 1993: 69).

In this way, when technical (or predominantly technical) control of the process or output is possible, complying with the standard of reciprocity and spreading information on objectives guides initiative towards the organization’s objectives, thereby enabling CE. When sufficient control of the process or output is not possible, the standard of reciprocity and spreading information on objectives, as previously mentioned, contribute to the socialization of employees and to establishing common values and objectives that enable social control and CE, if this is one of the firm’s priorities.

Ouchi (1979, 1980), endows great importance to the informal dimension of behaviour, from whence comes the importance, for any type of work (L1, L2, L3 or L4), of the standard of reciprocity and a coherent framework of ideas to guide behaviour. In the same sense, Ouchi and Maguire (1975) stress that all forms of control affect and modify behaviour.

Fama and Jensen (1983a, b)

Control and initiative, together with residual rights, are central concepts in classic studies on the agency theory concerning organizational forms and their means of efficient organization. From a wider perspective, rights to control decisions, rights to manage decisions and residual claims form the fundamental nucleus of the main studies of Fama, Jensen and Meckling (Jensen and Meckling 1976; Fama and Jensen 1983a, b, 1985; Jensen and Meckling 1992; Jensen 1983, 1998, 2001).

Technology determines the efficient scale of production and this leads to the desirability of separating, or joining, residual claimants and manager decisions (or residual claims y management rights), as necessary, or not, obtaining financing via various actions (with no restrictions). On the other hand, technology and managerial action determine the way in which specific knowledge is spread among the different members of the organization. If the technology is complex and leads to a relevant distribution of knowledge, as specific knowledge is hard to transmit, this will involve the division of the decision rights of specialists (be they managers or not) and control rights exercised by managers or by other specialists; if technology is simple and the managers and supervisors understand the work processes, de facto, decision rights and control rights will remain together, although a certain margin of initiative will be allowed to the employee, or even if initiative is encouraged.

The emphasis on the agency theory on delegating decision rights when knowledge is relevant clearly shows the importance of initiative in managers and employees as the basis for productivity and efficiency. The more knowledge employees incorporate into their work, thus becoming L3 or L4 type workers, their participation should become more (as a result of authorization) and more active, improving and enriching the organization. On the other hand, in terms of control, organizational agency theory considers this to always be possible through the separation of control and decision rights and the use of plans, budgets, inspections and the formalization of procedures. In other words, for the classic studies on organizational agency theory (Fama and Jensen 1983a, b), L4′′, or any work that possesses characteristics such as difficulty of measurement can be redirected using organizational and financial control mechanisms to any of the L1, L2, L3 o L4′, types of work, and are located in all cases above AB (Fig. 4).

In organizational agency theory, assigning decision rights and empowering the initiative shown by workers that incorporate relevant knowledge (L3 and L4, and to a certain extent, L2), and the existence of effective forms of control in all cases, establishes the basis for the management of CE. The management of CE, like any other form of management, will be complete, from the perspective of agency theory, after the application of economic rewards based on payment according to performance, rewards based on profit sharing and/or intrinsic rewards linked to the bet technical conditions and greater rationality of work (Jensen 1998).

Management and the corporate entrepreneur

This section contains an overall discussion of the contributions presented in section 3. Perrow (1967), Alchian and Demsetz (1972), Ouchi (1979, 1980) and Fama and Jensen (1983a, b), present a powerful proposal for understanding the characteristics of work and the most efficient way of managing it, if we look for complementarity between their different contributions. The authors mentioned identify the different characteristics of work that, although they are similar, involve different technical and/or social aspects, which lead them to propose different management solutions. We will go on to present an overall management model of the varying proposals.

A model for CE. Characteristics of work and management variables

To enable the homogeneity of the reasoning provided by each of the different authors, we will refer, when necessary, to different groupings of types of work: (L1, L2), (L3, L4), (L1, L2, L3, L4′) or (L4′′).

  • For Perrow (1967, 1970), L1 and L2 do not involve relevant knowledge, which therefore implies analyzable work that allows simple, efficient, centralized work, with low levels Pf and Pc.

    The author (1967) maintains a predominantly hierarchical, explicit and intentional view of the form of management (technical control) especially of the L1 and L2 types of work, but the way in which the managerial vision is mixed with conditions of materials that must be transformed forms the organizational context that guides the behaviour (social control) of any type of work (1970: 37–45).

    With regard to CE, the behaviour of L1 and L2, if deemed desirable, can be modified through training (Pf), authorization and organizational context (Pc), stimulating participation for organizational renewal or technical innovation. In this case, the model of types of work becomes dynamic: L1 and L2 incorporate knowledge, authorization and initiative, and shift respectively, towards the borders with L3 and L4 (Fig. 3).

  • For Alchian and Demsetz (1972), operative work (corresponding to L1 or L2) does not involve relevant knowledge, and this implies that the supervisor knows the process or the contents of work, carrying out an efficient, centralized management, with low levels of Pf and Pc.

    However, the hierarchical, explicit intentional vision of operative work (technical control) is, according to Alchian and Demsetz, an important complement to the means of measurement and to the assignation of rewards (technical and social control). The efficient use of technical means will depend upon the capacity to measure and discern incentives among the most productive and the least productive (1972: 778).

    In terms of CE, behaviour once more becomes important. Operative work (L1 or L2) will modify action and productivity according to an organizational context characterized by forms of measurement and reward. As in the previous case, through training (Pf), authorization and the introduction of institutional incentives (Pc), L1 and L2 will incorporate knowledge, initiative and commitment, shifting towards the borders with L3 and L4 (Fig. 3), thus becoming more useful for CE.

  • For Ouchi (1979, 1980), there are technologies and types of work (L1, L2, L3, L4′) in which incorporated knowledge allows control of the process and the control of output, which enables efficient control based on centralization and formalization (technical control). Levels of Pf and Pc here can be either low or high.

    The form of hierarchical, explicit and intentional management, in terms of control, is always conditioned for Ouchi by the extent to which the standard of reciprocity is complied with, which is the condition of the organizational context (or of the institutional framework) so that the non-formal dimension of behaviour (social control) adds to the formal dimension (technical control).

    In terms of CE, the standard of reciprocity and a philosophy of guidance on the part of the management in terms of what the firm is and what its fundamental aims are constitutes the organizational framework that, together with personnel selection, training and authorization (Pf and Pc), can lead any type of work (L1, L2, L3, L4′) to active participation or a high degree of initiative in organizational renewal and/or technical innovation.

  • For Fama and Jensen (1983a, b), there are technologies and types of work (L1, L2) in which there is no relevant involvement of knowledge, which leads to a form of management where decision rights are not delegated (centralized). Levels of Pf and Pc are low here.

    The form of management is hierarchical, explicit and intentional in these types of work (technical control), both in terms of control and initiative. Decision rights are not delegated. However, as Jensen (1998) shows, the informal dimension and the need to order behaviour through incentives is also present here (technical and social control).

    With regard to CE, a form of management that guides L1 and L2 towards entrepreneurial activity should be based upon training (Pf), economic and institutional incentives and intrinsic incentives linked to the best technical conditions and greater rationality of work (Jensen 1998) (technical and social control).

With regard to more skilled work, with a greater involvement of knowledge: L3, L4 and L4′′.

  • For Perrow (1967, 1970), L3 and L4 involve relevant knowledge, which implies non-analyzable work. Decentralization and a high level of participation on the part of the worker are the main characteristics here, with high levels of Pf and Pc.

    The L3 and L4 types of work require forms of management with a low degree of centralization (Fig. 3), which implies a greater level of authorization and initiative. The low level of technical control that this implies is compensated for by greater social control, as a result of greater training and an organizational context that leans towards commitment to attaining objectives (high levels of Pf and Pc, Fig. 3).

    In terms of CE, modifying the behaviour of L3 and L4 is fundamentally based on training (Pf), authorization and an organizational context that lends itself to commitment and cooperation (Pc) (Perrow 1970). These types of work are fundamental for innovation of an organizational nature and for obtaining radical innovation, which depends upon the formal design of the organization that allows the creation of knowledge and innovation and upon a suitable organizational context.

    For Alchian and Demsetz (1972), professional or creative work (L3 or L4) involves relevant knowledge which implies that the supervisor cannot have sufficient knowledge of the process or contents of the work.

    The social dimension of the organization has an extraordinarily influential role to play in these types of work. The smooth running of the firm and its survival depend here on successfully completing the reward system or the social control of behaviour.

    With regard to CE, this depends upon the institutional form of the firm. Firms that profit share or partnership firms guide behaviour toward the objectives of the firm, making collective entrepreneurship possible if this is one of the firm’s priorities.

    For Ouchi (1979, 1980), there are technologies and types of work with the characteristics of L4′′, in which the ambiguity of the task or the knowledge involved allows neither process control nor output control. Levels of Pc are high in this case.

    In these types of work that involve relevant skills or knowledge and are ambiguous and hard to control, the social dimension of the organization becomes remarkably important. The very existence of the organization depends, in this case, on common traditions and values (social control) that lead objectives to be congruous (Ouchi 1980).

    With regard to CE, besides the appropriate selection of personnel, training, authorization, complying with the standard of reciprocity and the existence of a management philosophy to guide members towards the underlying aims of the firm, here, common traditions or values that complete the organizational or institutional framework are necessary. This thus makes it easier for L4′′ type work to be oriented towards the firm’s objectives, and if applicable, towards CE.

    For Fama and Jensen (1983a, b) the existence of the L3 and L4 types of work which involve the relevant incorporation of specific knowledge leads to a decentralized form of management and control in which decision rights are delegated and the corresponding control mechanisms are established. Levels of Pf and Pc are high here.

    Specific knowledge is knowledge of the details and concrete situations whose contents cannot be transferred to higher hierarchical levels so that decisions can be made. As a result, efficient decisions and exercising initiative can only be carried out where the details are known, thereby enabling the delegation of decision rights and the corresponding technical and social control.

    With regard to CE, the form of management that guides L3 and L4 towards entrepreneurial activity must be based on economic, institutional and intrinsic incentives, the latter being linked to satisfactory conditions of professional and/or creative work (Jensen 1998) (technical and social control).

Conclusions

In these conclusions, we summarize the main contributions of the authors studied, and in what ways the application of their findings might favour collective entrepreneurship within the organization.

Skills, knowledge and specific knowledge incorporated to different extents by L1, L2, L3 and L4, constitute the basic characteristics of work that make one or other level of selection, training, reward systems, authorization, delegation of decision rights and initiative and make necessary one or other form of technical and social control to obtain efficient management.

Besides being efficient, if we want the management to serve CE, this provides orientation to the different management tools, from personnel selection to control, with training, reward systems, authorization and initiative taking on particular relevance within which the organizational and institutional context establishes the firm ground upon which all the management tools are based and made to work in harmony. Table 1, summarizing the main contents of this article, shows the involvement of skills and knowledge in the different types of work, their levels of, authorization, initiative and control, as well as their orientation towards CE.

Table 1 Characteristics of work, initiative, control and CE
Full size table

Relating the classic studies of Perrow (1967, 1970), Alchian and Demsetz (1972), Ouchi (1979, 1980) and Fama and Jensen (1983a, b) with the ideas on collective entrepreneurship described by Hayton (2005) or Zotto and Gustafsson (2008) in a conceptually useful way has been no easy task.

The classic authors studied here are concerned with understanding the fundamental characteristics of work and the requirements that these characteristics impose on the organization (a question of fit) in order to achieve efficiency. This implies a methodology that is typical of the contingency approach (Perrow 1967), where the different characteristics of the explanatory variables (technology or types of work) lead to different forms of management and to different efficient organizational contexts. However, CE implies a universalist approach, where all types of work must be pushed towards a single form, characterized by the incorporation of knowledge, initiative and commitment to CE.

Perhaps the difficulty of a theoretical framework that includes the authors studied and CE is that this is only the reflection of a more general difficulty. The difficulty is that which is inherent in introducing the basic research theme (characteristics of work and its most efficient form) and the applied or normative research (managing work for CE) into the same discussion.

If we had added other contributions from human resource management (Schuler and MacMillan 1984; Schuler and Jackson 1987; Baron and Kreps 1999) or from organizational routines and capacities (Zollo and Winter 2002; Winter 2003), this would have allowed for a wider set of variables (or a more complete model) for managing CE, but this would have meant an excessively long study.