Open & Combined Systems Flashcards
What is Structure?
Structure is the official, formal relationships between org members (e.g., hierarchy, rules, org chart) and informal relationships between them (e.g., taking lunch breaks, corruption)
Structure can be thought of as comprising the following dimensions:
• Differentiation
• Integration
• Centralization (for decision-making)
• Formalization (rules, SOPs, things in writing)
Contingency factors that drive structure: uncertainty, innovation, interdependence, strategy, and size
Empirically, the strategy leads to structure argument from Chandler has been validated.
Burns & Stalker (1961)
Mechanistic & Organic Structures (continuum)/contingency theory
Post WWII, studied Scottish & English firms (many replicated past management styles (i.e., hierarchy) that worked previously)
Environment is key for FIT
Key determinant of form = uncertainty in environment
Mechanistic (stable conditions)
• Knowledge is located at the top of the hierarchy
• Interactions are vertical (between supervisors and subordinates)
• Decisions are top-down
• Roles are clearly defined with responsibilities
• Centralized decision-making
Organic (dynamic conditions)
• Adjustment/recalibration of tasks to the current environment
• People can’t hide behind “roles” and claim it’s someone else’s job to do something. Everyone must take responsibility.
• Norms of behavior are established by the norms of the coworkers, not drive by top management
• Knowledge may be located anywhere in the network, not assumed that the CEO knows everything
• Lateral communication
• Authority comes from expertise…similar to Weber in that promotions should be based on expertise (not familial relations)
Integration points: role theory (Katz & Kahn), teamwork/interdependence
Donaldson (2007)
Neo-Contingency Theory
- Burns & Stalker (1961) and Woodward (1965) were early contingency theorists—contingency was a theory of equilibrium—firms move from misfit to fit to achieve higher performance
- But traditional contingency theory never said WHY firms ended up in misfit to begin with
• Interesting tie to goal setting theory (Locke & Latham, 1990) in that people set higher performance goals and effectively create a gap or deficit, which is analogous to misfit.
Neo-contingency theory argues that there is feedback from high performance that generates contingencies (e.g., increase in financial resources)
• Factors that promote change (business cycle, competition, debt, and divisional risk)
• Factors that forestall change (diversification, divisionalization, divestment, and directors)
Most we can hope for is quasi-fit
Firms rotate in and out of fit in response to contingencies and performance
Lawrence & Lorsch (1967)
Contingency Theory/1st to really discuss org design
Studied firms in different environmental conditions:
- Also sees organizations as complex social systems (like resource dependence and population ecology)
- There is no one best way to lead people or to design an organization, rather, the choices made must fit the situation faced.
- Highlight conflicts in each example
- plastics org (more dynamic environment, decentralized decision making) led to more stress about role ambiguity
- container org (stable environment, hierarchical, centralized), stressed that upper management is constantly micro-managing
Pugh (1973)
• Contribution: Better description of context & operationalized it for scientific study
Variables for structure:
• Specialization – organization’s activities divided into specialized roles
• Standardization – has standard rules and procedures
• standardization of employment practices –
• Formalization – are things written down?
• Centralization – decision-making (hierarchical?_
• Configuration – shape of org’s role structure (e.g., span of control)
Orgs may be bureaucratic in different ways
Variables for context:
• Origin and history, ownership and control, size, charter, technology, location, and interdependence
Context matters, but managers still have a lot of leeway
