SCANCOR at the Weatherhead Center Seminar
Date and Time
Location
Does Decentralisation Drive Innovation the Same Way in Different Countries: Evidence from China and the Nordics
Presenter
- Carl F. Fey, Visiting Scholar, SCANCOR at the Weatherhead Center (fall 2026). Professor, Department of Strategy and Entrepreneurship, BI Norwegian Business School.
Moderator
- Jocelyn Viterna, Codirector, SCANCOR at the Weatherhead Center; Faculty Associate; Harvard Academy Senior Scholar. Professor of Sociology, Department of Sociology; Chair, Committee on Degrees in Studies of Women, Gender, and Sexuality, Harvard University.
Contact
Diana Ocampo Belloso
dianaocampobelloso@wcfia.harvard.edu
Abstract
Co-author: Yian Chen, Aalto University School of Business.
Research on organisational structure and innovation has long suggested that decentralisation supports product innovation, yet empirical findings remain mixed and the conditions under which decentralised authority requires formal coordination remain unclear. For example, does decentralization in firms in China which has a tradition of authoritarian leaders have the same results and work the same way as in the Nordics which have traditions of high empowerment? Drawing on Burns and Stalker’s structural contingency theory, we develop a cross-cultural moderated mediation model linking decentralisation, internal knowledge sharing, formalisation, and product innovation. Using survey data from 356 firms in China and the Nordic countries, two contexts with contrasting power distance values, we examine how national cultural context shapes the innovation consequences of structural design. The results show no direct effect of decentralisation on product innovation in either context. Instead, internal knowledge sharing mediates the decentralisation–product innovation relationship for Nordic firms. For Chinese firms, formalisation positively moderates the relationship between decentralisation and internal knowledge sharing, such that the indirect effect of decentralisation on product innovation through internal knowledge sharing becomes significant only when formalisation is high. These findings extend structural contingency theory by showing that decentralisation is not universally innovation-enhancing; rather, its effectiveness depends on culturally aligned coordination mechanisms. The study highlights how organic and mechanistic structural elements can complement each other differently across countries, with formalisation enabling decentralised knowledge sharing in high power distance contexts while being less consequential in low power distance contexts.
Bio
Dr. Carl F. Fey is a Professor of Strategy at BI Norwegian Business School in Oslo, Norway and a Visiting Scholar at SCANCOR at the Weatherhead Center at Harvard University. Previously he was Dean of Nottingham University Business School China and led it through a substantial period of change and upgrading. He has also been a Professor at Aalto University and Stockholm School of Economics where among other things he helped start and lead the development of a branch campus in Russia. Fey is an elected fellow of the Academy of International Business and is recipient of the 2013 Journal of International Business Studies Decade Award. Fey is an expert in international business, innovation, leadership, knowledge transfer, organizational culture, virtual work, internationalization, and international mergers and acquisitions. Professor Fey’s work helps firms to understand which management practices can help increase organizational effectiveness in today’s increasingly dynamic and international world taking into account the future of work and cultural/institutional differences between countries. Professor Fey has a special interest in understanding what practices works well in China. Fey is a highly sought-after executive educator, consultant, and public speaker (for example, he is a frequent speaker at Boao Forum and similar events) and also frequently in the media (for example, last year he had over 200 appearances including republishing in the Chinese media alone. For a sample media appearance see Fey on CGTN's business/economics talkshow talking about his innovation research.