Young_2004 - Academy of Management Journal 2004, Vol. 47,...

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PRODUCT-LINE MANAGEMENT IN PROFESSIONAL ORGANIZATIONS: AN EMPIRICAL TEST OF COMPETING THEORETICAL PERSPECTIVES GARY J. YOUNG MARTIN P. CHARNS Department of Veterans Affairs and Boston University TIMOTHY C. HEEREN Boston University Guided by two competing theoretical perspectives, we investigated effects of structure on performance and human resource outcomes of general hospitals. Neither a product- line nor a functional structure was associated with the performance outcomes of service quality and innovation. However, the product-line structure was negatively associated with the human resource outcomes, professional development, and job satisfaction. In line with the professional autonomy perspective, our results raise questions about the appropriateness of a product-line structure for professional orga- nizations. A fundamental issue for organizational theory is how best to design complex organizations in terms of grouping job positions. Organizational theorists have long pondered the relative advantages and disadvantages of two basic types of structures, one in which job positions are grouped by function, and another in which they are grouped by product (Charns & Schaefer, 1983; Galbraith, 1973; Mintz- berg, 1979, 1981). A functional structure groups positions according to labor specialization (for in- stance, marketing, sales, and production). By con- trast, a product-line structure groups positions ac- cording to the type of product (or service) that occupants of the positions help the organization produce. In essence, a functional structure is based on inputs, while a product-line structure is based on outputs (Charns & Tewksbury, 1993). Although the functional structure was the domi- nant approach among U.S. business organizations through the first half of the 20th century, after World War II the product-line structure, also known as the multidivisional form, began to spread quickly within the manufacturing industry and cer- tain service sectors of the economy (Fligstein, 1985; Williamson, 1975). More recently, this type of structure has gained popularity among hospitals, research and development companies, and other types of professional organizations that are charac- terized by workforces consisting of highly educated individuals who traditionally have had much dis- cretion to control and coordinate their own work activities (Scott, 1998). The actual prevalence of the product-line structure among professional organi- zations is not known, but various anecdotal sources indicate it is on the rise (Eto, 1991; Camden Group, 2000; Galbraith, 1995; Parker, Charns, & Young, 2001; Scott, 1998). Notwithstanding the growth in the popularity of the product-line structure among professional or- ganizations, no systematically conducted study has addressed the issue of whether this structure is appropriate for this type of organization. In this paper, we report results from a study that focused on the effects of product-line structures in general hospitals. Our paper makes two contributions to management theory and research. First, it extends
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Young_2004 - Academy of Management Journal 2004, Vol. 47,...

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