Companies that can quickly respond to external changes are more likely to achieve long-term success, and by this measure, small firms excel. New research by New York Institute of Technology (NYIT) School of Management assistant professor Radoslaw Nowak suggests a fix for this drawback: empowering low-level employees.

An organization’s capacity to absorb new information and to implement corresponding changes, known as “absorptive capacity,” declines as it gets bigger. In this sense, large companies are advised to take a cue from comparatively laid-back startups. “As they grow,” says Nowak, “organizations tend to become more political and bureaucratic. That creates structural barriers to communication.”

In a paper published in the International Journal of Innovation Management, Nowak recommends a grassroots solution for big organizations: allow low-level employees who are experts at what they do to make their own decisions about how best to “get the job done.” While confirming the inverse relationship between size and absorptive capacity, Nowak’s findings also show that firms with empowered employees are less likely to display the expected negative effects.

Nowak analyzed data collected from over 370 employees at 71 U.S. hospitals and found negative correlations between size and absorptive capacity. He also saw the evidence of employee empowerment’s mitigating the negative effects.

Granting authorization to ground-level employees enables them to be alert and solutions-oriented, allowing them to identify next steps and take action to address challenges, thus moving the organization forward. “Empowerment is about delegating authority,” says Nowak. “Allowing qualified employees at low levels to make decisions could effectively reduce the negative impact of an organization becoming a big political system. They will be driving positive organizational change from the bottom up.”

The study states that “a high degree of employee empowerment could be viewed as a source of a sustained competitive advantage as it may continuously challenge a firm’s core rigidities.” In practice, “empowered employees can become a change agent.”

Before joining NYIT in 2015, Nowak worked as a human resources manager and consultant for Fortune 500 companies. His doctoral research focused on knowledge creation and its impact on organizational success

Source: New York Institute of Technology