Task bottlenecks and resource bottlenecks: A holistic examination of task systems through an organization design lens

Abstract Research Summary Using an organization design lens, we explore how key characteristics of both task systems and their associated resources may benefit firms. We unpack task system interdependencies by studying the interaction of decentralization and complexity, examining resource fungibility and resource slack, and exploring their joint alignment. Our context is the scheduled U.S. passenger airline industry over two decades. Results show that firm performance improves when (a) task system decentralization and complexity are aligned, either more or less of both; (b) having both resource fungibility and resource slack, not simply more of one or the other; and (c) aligning less decentralized and less complex task systems with fungible and available resources. Our findings underscore the importance of holistically managing tasks and resources to minimize bottlenecks within organizations. Managerial Summary Eliminating bottlenecks can help firms improve performance. Our study focuses on two types of bottlenecks—task system bottlenecks stemming from the design of activities and resource bottlenecks, created when necessary resources are already in use or available resources are not applicable. Our results show that firms benefit when task system properties of decentralization and complexity are aligned and when firms' resources are both fungible and available; these characteristics also reinforce each other. Thus, managers should be aware of both task system properties and resource characteristics to avoid bottlenecks, so that the tasks to which the resources are applied can be completed. In addition, managers should ensure to have available and fungible resources at their disposal, especially when organizations have a centralized and less complex design.