Sources of Structural Complexity: The Peripheral Components

1
Sources of Structural Complexity The Peripheral
Components

• I. Size and structure
• Defining and measuring size
• Size measures how much of the work the
  organization carries on the scale on which the
  work is conducted.
• the physical capacity of an organization (e.g.,
  square footage of floor space in a factory,
  number of beds in a hospital)
• current scale of performance (e.g., sales
  volumes, number of clients)
• a measure of discretionary resources available to
  the organization (e.g., net assets)
• the number of employees (participants)
• As structure variables, researchers have employed
  the measures of formalization, centralization,
  and bureaucratization.

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Sources of Structural Complexity The Peripheral
Components

• I. Size and structure
• (2) Size, bureaucratization, and differentiation
• The degree of bureaucratization
• the relative size of the administrative
  components of an organization
• The degree of differentiation
• the number of different types of organizational
  subunits.
• Large organizations tend to be structurally more
  complex and differentiated.
• Organizations show less consistent association
  between organizational size and
  bureaucratization.
• Larger organizational size, by increasing
  structural differentiation, increases the size of
  the administrative component. However, at the
  same time, larger organizational size, by
  increasing the volume of homogenous work within
  organizational subunits, reduces the size of the
  administrative component (the degree of
  bureaucratization).

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Sources of Structural Complexity The Peripheral
Components

• I. Size and structure
• (3) Size, formalization, and centralization
• Formalization refers to the extent to which roles
  and relationships are specified independently of
  the personal characteristics of the occupants of
  positions
• Formalization can be measured by the extent to
  which rules such as formal job definitions and
  procedural specifications govern activities
  within the organizations.
• Larger organizations tend to have more formalized
  structures.
• Organizational size is negatively correlated with
  centralization.
• Centralization is negatively associated with
  formalization.
• Centralization and formalization may be viewed as
  alternative control mechanisms. More formalized
  arrangements permit more decentralized decision
  making.

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Sources of Structural Complexity The Peripheral
Components

• I. Size and structure
• (4) Worker competence, formalization, and
  centralization
• The more highly qualified workers are found in
  the organizations that exhibit fewer
  bureaucratic attributes.
• If organizations have more highly skilled
  workers, they exhibit lower levels of task
  specialization, formalization, standardization,
  and centralization.

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Sources of Structural Complexity The Peripheral
Components

• II. Environment and structure
• (1) Buffering, bridging, and structural
  complexity
• a. Mapping environmental complexity
• As the need for buffering techniques increases,
  we expect to observe the development and growth
  of new specialized staff roles and departments
  buffering units that interface with the input and
  output environments of the organization.
• Consider the simple bridging strategies, such as
  bargaining, contracting, and co-optation. As
  their task and institutional environments become
  more differentiated and complex, organizations
  responds by adding new types of occupational
  groups and specialists to deal with each of the
  environmental sectors.
• Organization, as an open system, adapts to more
  complex environments by becoming more complex.
  Organization is mapping or incorporating the
  environmental variety into its own structure.

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Sources of Structural Complexity The Peripheral
Components

• II. Environment and structure
• (1) Buffering, bridging, and structural
  complexity
• b. Conflict and integration
• The differentiated organizational structures
  require more efforts of integration which
  sometime leads to additional increase in
  structural complexity.
• liaison roles

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Sources of Structural Complexity The Peripheral
Components

• III. Macro structural adaptations
• (1) From structural to multidivisional structures
• Multidivisional (M-form) structure consists of a
  general corporate office and several
  product-based or regional divisions, each of
  which contains functionally differentiated
  departments. These departmental units are
  subdivided into work units.
• Rational approach
• Structure follows strategy.
• Natural (institutional) approach
• Structure also follows fashion.
• the crucial role played by the nation-state and
  its policies (e.g., antitrust act)

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Sources of Structural Complexity The Peripheral
Components

• III. Macro structural adaptations
• (2) Divesting and downsizing
• More recently, we observe that number of large
  companies have engaged in selling off divisions
  and other types of downsizing activities.
• Many companies have also engaged in reducing the
  numbers of their full time employees (downsizing)
  either by contracting out jobs, reorganizing work
  in ways that enabled fewer workers to perform the
  tasks formerly requiring larger numbers, or
  hiring temporary or part-time employees.
• Parallel developments have also occurred in the
  public sector. During the past two decades, many
  traditional governmental agencies (the typical
  bureaucracy) have undergone restructuring and
  downsizing.

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Sources of Structural Complexity The Peripheral
Components

• III. Macro structural adaptations
• (3) From independent to interdependent, network
  forms
• The assumption that bigger is better, that all
  the advantages are on the side of bringing more
  and more activities and resources under the
  control of a single hierarchy, has begun to give
  way to the recognition that important strengths
  are associated with alliances or loose
  confederations of organizational forms.
• These alliance and networks are another
  structural form of organizing between markets and
  hierarchies (Powell and Smith-Doerr 1994).
• Typology of network forms Harrison (1994)
• Networks in craft-type industries
• Small-firm-led industrial districts
• Geographically clustered big-firm-led production
  systems
• Strategic alliances

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Sources of Structural Complexity The Peripheral
Components

• IV. Connecting the core and peripheral structures
• (1) Tight and loose coupling
• Rational system theorists stress the tight
  coupling of managers and workers behavior.
• In contrast, natural system theorists recognize
  the presence of considerable loose coupling as an
  important structural and operational feature of
  most organizational system.
• Human relations school
• Meyer and Rowan (1977) argue that organizations
  selectively decouple their form structures from
  the activities carried on in their technical core
  (e.g., educational organizations).
• (2) Managing up, down, and sideways
• Managers need to manage laterally across work
  units as well as up and down, between levels of
  hierarchy and between the organization and its
  environment.