Organizational structure

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Organizational structure

• Torsdag 17. november 2005
• Forelesning 5

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Core question

• Which factors determine the structure of the
  organization?

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Division and coordination

• Every organized human activity from the making
  of pots to the placing of a man on the moon
  gives rise to two fundamental and opposing
  requirements the division of labor into various
  tasks to be performed, and the coordination of
  these tasks to accomplish the activity. The
  structure of an organization can be defined
  simply as the sum total of the ways in which it
  divides its labor into distinct tasks and then
  achieves coordination among them.
• Henry Mintzberg The Structure of Organizations
  (1979)

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Division and coordination

• Two main structures of relevance
• The division of labor
• Systems of coordination and control

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Outline

• Core technology and structure, rational
  perspectives
• Natural views on structure
• Professional organizations
• Size and structure
• Networks

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1. Core technology and structure

• The main argument
• The structuring of organizations (division of
  labor and control mechanisms) is determined by
  the nature of their core technology
• Rational system argument (contingency theory)

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1. Core technology and structure

• The technical core of an organization
• Define the primary outputs produced
• Follow the process by which the organization
  produces these outputs from beginning to end
• Include all components that are crucial for the
  functioning of the production process
• Technical components
• Organizational components
• Knowledge components

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1. Core technology and structure

• Exercise
• Describe the technical core of your organization

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1. Core technology and structure

• Three dimensions of core technology
• Complexity number of items included in the
  process
• Uncertainty variability of items in the process
• Interdependence connectedness of items

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1. Core technology and structure

• Exercise
• Categorize the technical core of your
  organization on the three dimensions using three
  levels high, medium, low
• Complexity number of items included in the
  process
• Uncertainty variability of items in the process
• Interdependence connectedness of items

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1. Core technology and structure

• Organizations have different technical cores and
  their structures vary accordingly
• Assumptions
• High complexity ? structural differentiation
• High uncertainty ? less formalization
• High interdependence ? coordination important

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1. Core technology and structure

• Find concrete examples of the following kinds of
  organizations
• Low complexity, uncertainty, interdependence
• High complexity, uncertainty, interdependence

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1. Core technology and structure

• Basic coordination mechanisms
• Rules and programs
• Schedules
• Departmentalization
• Hierarchy
• Delegation
• Client coordination
• Primarily capable of handling moderate levels of
  complexity, uncertainty and interdependence

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1. Core technology and structure

• Advanced coordination strategies
• Reducing information (complexity, uncertainty,
  interdependence)
• Process organization
• Slack resources

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1. Core technology and structure

• Advanced coordination strategies
• Increase information handling capacity
• Add systems / resources in established hierarchy
• Lateral connections
• Liaison roles
• Task forces
• Project teams
• Matrix structures

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2. Natural views on structure

• The social shaping of technology
• The development and implementation of
  technologies a result of social processes
• Attacks the idea that technology determines
  organizational structure
• Social structures shape technology rather than
  technology shaping structures

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2. Natural views on structure

• Structures as choices
• Organizations can choose a number of different
  alternative structures in a given situation
• Choice will be the result of internal struggles
  for power

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2. Natural views on structure

• Informal structures
• Challenges the idea that formal organization can
  solve coordination problems
• Organizations need to take psychological and
  social aspects of the work place into account

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2. Natural views on structure

• Tacit knowledge
• Challenges the idea that organizations can
  formalize the essential parts of their technical
  cores.
• Knowledge is often tacit and well functioning
  routines may not be the result of formal
  procedures.

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3. Professional organizations

• The competent professional as a resource for
  handling increased complexity
• Professional organizations incorporate two
  layers of response to task complexity complex
  performers enter into and are supported and
  constrained by complex organizational structures.

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4. Size and structure

• Larger organizations tend to be more structurally
  complex
• Larger organizations are generally more
  formalized
• Formalization allows for increased
  decentralization of decision making authority

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5. Networks

• Neither market nor hierarchy
• Complimentary strengths between organizations
• Relations important
• Conflicts handled by norms of reciprocity