Demand heterogeneity, decomposability, and the coordination of service innovation in multi-unit organizations

This article presents a computational model of organizational search that compares different strategies of organizing service innovation in a multi-unit organization: centralisation, decentralisation, and partition search conducted by the different business units on a specific part of the innovation. The performance is compared for varying degrees of problem decomposability and varying levels of demand heterogeneity between units. It illustrates the findings using a case study from the health care sector.