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

• Date: 01 January 2021
• Published date: 01 January 2021
• DOI: http://doi.org/10.1111/joms.12643
• Author: Nicolai J. Foss

© 2020 Society for the Advancement of Management Studies and John Wiley & Sons, Ltd.

The Impact of the Covid-19 Pandemic on Firms’

Organizational Designs

Nicolai J. Foss

Copenhagen Business School

Keywords: Covid-19, delegation, organization design, path dependence, temporal frame

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 after-

math 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 under-

stood 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 organi-

zation design. For organization design scholars the pandemic presents not only a unique

test-bed for examining existing principles of organizational design but might also stimu-

late new theory related to the temporal dimension of organization design and the influ-

ence of path-dependence. Thus, reflecting on the pandemic suggests that major external

contingencies have different short-term as compared to long-term effects on organiza-

tional design, but also that major disturbances are likely to leave ‘permanent’ traces on

Journal of Man agement Studi es 58:1 January 20 21

doi:10. 1111/jo ms. 126 43

Address for reprints: Nicolai J. Foss, Department of Strategy and Innovation, Copenhagen Business School,

Kilevej 12, 2nd floor, 2000 Frederiksberg, Denmark (njf.si@cbs.dk).