FOUNDATIONS OF ORGANIZATION STRUCTURE
After studying this chapter, students should be able to:
Identify the six key elements that define an organization’s structure.
Explain the characteristics of a bureaucracy.
Describe a matrix organization.
Explain the characteristics of a virtual organization.
Summarize why managers want to create boundaryless organizations.
Contrast mechanistic and organic structural models.
List the factors that favor different organizational structures.
Explain the behavioral implications of different organizational designs.
The theme of this chapter is that an organization’s internal structure contributes to explaining and
predicting behavior. That is, in addition to individual and group factors, the structural relationships in which people
work have a bearing on employee attitudes and behavior.
What is the basis for the argument that structure has an impact on both attitudes and behavior? To the
degree that an organization’s structure reduces ambiguity for employees and clarifies such concerns as “What am
I supposed to do?,” “How am I supposed to do it?,” “To whom do I report?,” and “To whom do I go if I have a
problem?” it shapes their attitudes and facilitates and motivates them to higher levels of performance.
Of course, structure also constrains employees to the extent that it limits and controls what they do. For
example, organizations structured around high levels of formalization and specialization, strict adherence to the
chain of command, limited delegation of authority, and narrow spans of control give employees little autonomy.
Controls in such organizations are tight, and behavior will tend to vary within a narrow range. In contrast,
organizations that are structured around limited specialization, low formalization, and wide spans of control
provide employees greater freedom and, thus, will be characterized by greater behavioral diversity.
Exhibit 15-11 visually summarizes what we will discuss in this chapter. Strategy, size, technology, and
environment determine the type of structure an organization will have. For simplicity’s sake, we can classify
structural designs around one of two models: mechanistic or organic. The specific effect of structural designs on
performance and satisfaction is moderated by employees’ individual preferences and cultural norms.
One last point: Managers need to be reminded that structural variables such as work specialization, span
of control, formalization, and centralization are objective characteristics that can be measured by organizational
researchers. The findings and conclusions we will offer in this chapter, in fact, are directly a result of the work of
these researchers, but employees do not objectively measure these structural characteristics! They observe
things around them in an unscientific fashion and then form their own implicit models of what the organization’s
structure is like. How many people did they have to interview with before they were offered their jobs? How many