Slajd 1

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Determinants of
organizational structure
dr. hab. Jerzy SupernatInstitute of
Administrative StudiesUniversity of Wroclaw
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Determinants of organizational structure

• Organizational structure is
• a consequence of the simultaneous impact of many
  factors.
• Fundamental determinants
• context (situation in which an organization
  operates)
• design (organizational actions in regard to
  structure decisions made in an organization
  about how the organization is to be structured)

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Determinants of organizational structure

• Contextual determinants
• internal
• organizational size
• technology
• organizational culture
• external
• environment
• national culture

dr. hab. Jerzy Supernat
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Determinants of organizational structure

• Organizational design
• strategic choice (designing a structure by the
  organization itself)
• institutional isomorphism (making use of already
  existing organizational forms)

dr. hab. Jerzy Supernat
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Determinants of organizational structure

• Size of an organization
• the number of people in an or-ganization
• the physical capacity of an or-ganization
• organizational inputs and out-puts
• financial resources

dr. hab. Jerzy Supernat
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Determinants of organizational structure

• Technology
• Technology involves acting on and/or changing an
  object from one state to another. The object can
  be a living object, a symbol, or an inanimate
  object.

dr. hab. Jerzy Supernat
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Determinants of organizational structure

• Types of technology (based mainly on research by
  Joan Woodward, 1916-1971)
• project technology
• jobbing/unit/one-off technology
• batch technology
• small-batch technology
• large-batch technology
• line/mass production technology
• continuous-process technology

J. Woodward, Industrial Organization Theory and
Practice, Oxford University Press 1965 Many of
the variations found in the organizational
structure of the firms studied did appear to
be closely linked with differences in
manufacturing techniques. Different technologies
imposed different kinds of demands on individuals
and organizations, and these demands had to be
met through an appropriate structure.
dr. hab. Jerzy Supernat
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Determinants of organizational structure

• Organizational culture
• Chester I. Barnard
• One of the main functions of the executive is to
  set the tone for the entire organization.

dr. hab. Jerzy Supernat
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Kontekstowe uwarunkowania struktury organizacyjnej
Chester I. Barnard (1886-1961)
dr hab. Jerzy Supernat
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Determinants of organizational structure

• Organizational culture definition
• Edgar H. Schein (born 1928)
• A pattern of shared basic assumptions that the
  group learned as it solved its problems of
  external adaptation and internal integration,
  that has worked well enough to be considered
  valid and, therefore, to be taught to new members
  as a correct way to perceive, think and feel in
  relation to those problems

dr. hab. Jerzy Supernat
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Determinants of organizational structure
Problems related to external adaptation concern
views of an organizations tasks and objectives
as well as the means to implement and assess
them. A solution has to be found for them so that
the organization can function and succeed in its
environment. Problems related to internal
integration concern the crea-tion of a common
language and concepts, defining group limits, the
level of authority relationships and interaction,
as well as methods of reward and punishment. A
solution has to be found for these so that
members of the organization can function together
in an organized and predictable working community.
dr. hab. Jerzy Supernat
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Determinants of organizational structure

• Environment
• Of primary interest is the social environment of
  an organiza-tion, but the physical environment
  (e.g. climate or geography) can also be
  important, particularly for the organization that
  utilizes or affects that physical environment.

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Determinants of organizational structure
PEST analysis analysis of a general (indirect)
environ-ment of the organization, usually taking
into account four dimensions - p olitical - e
conomic - s ocial - t echnological
Show me a friend in need and Ill show you a pest
?
dr. hab. Jerzy Supernat
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Determinants of organizational structure

• National culture
• the national culture is the main factor
  determin-ing organizational culture culture
  bound view
• organizational characteristics are based on
  factors other than the national culture culture
  free view

Samurai of the Satsuma Clan, circa 1867.
dr. hab. Jerzy Supernat
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Determinants of organizational structure
National culture and organizational culture
overlap. For some issues national culture is
most important, whilst for other issues the
organizational culture is more important. An
analysis of Japanese companies located in the
United States by William G. Ouchi and Alfred M.
Jaeger, has found the following general
differences between Japanese and American firms
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American organization
Japanese organization

1. Short-term employment.
2. Individual decision making.
3. Individual responsibility.
4. Rapid evaluation and promotion.
5. Explicit, formalized control.
6. Specialized career path.

1. Lifetime employment.
2. Consensual decision making.
3. Collective responsibility.
4. Slow evaluation and promotion.
5. Implicit, informal control.
6. Nonspecialized career path.

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William G. Ouchi
Alfred M. Jaeger
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Determinants of organizational structure
Strategic choice The importance of strategic
decisions concerning an organizational
structure emphasized Alfred D. Chandler.
According to his famous statement structure
follows strategy.
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Projektowe uwarunkowania struktury organizacyjnej
Alfred D. Chandler (1918-2007)
dr hab. Jerzy Supernat
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Determinants of organizational structure
The idea of bounded rationality by Nobel
laureate Herbert A. Simon (1916-2001) means that
strategic decisions are not necessarily optimal
decisions. Nevertheless the con-cept of
equifinality stresses that decisions and decision
making are important.
Ludwig von Bertalanffy (1901-1972) In any closed
system, the final state is unequivocally
determined by the initial conditions e.g. the
motion in a planetary system where the positions
of the planets at a time t are unequivocally
determined by their positions at a time t. This
is not so in open systems. Here, the same final
state may be reached from different initial
conditions and in different ways. This is what is
called equifinality.
dr. hab. Jerzy Supernat
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Projektowe uwarunkowania struktury organizacyjnej
Herbert A. Simon
dr hab. Jerzy Supernat
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Determinants of organizational structure

• In concrete example an organization faces the
  choice between
• outsourcing (outside resource using)
• insourcing (inside resource using)

dr. hab. Jerzy Supernat
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Projektowe uwarunkowania struktury organizacyjnej
Model T
Year 1915
dr hab. Jerzy Supernat
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Projektowe uwarunkowania struktury organizacyjnej
Model T
dr hab. Jerzy Supernat
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Projektowe uwarunkowania struktury organizacyjnej
Henry Ford next to his Model T in 1921.
dr hab. Jerzy Supernat
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Determinants of organizational structure
Institutional isomorphism Paul J. DiMaggio,
Walter W. Powell organizations are
becoming increasingly homogeneous within
organizational fields. By organizational
field, we mean those organizations that, in the
aggregate, constitu-te a recognized area of
institutional life key suppliers resource and
product consumers, regulatory agencies and other
organizations that produce similar services and
products. The virtue of this unit of analysis is
that it directs our attention to the totality
of relevant actors.
dr. hab. Jerzy Supernat
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Projektowe uwarunkowania struktury organizacyjnej
Paul J. DiMaggio
Walter W. Powell
dr hab. Jerzy Supernat
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Determinants of organizational structure

• Types of isomorphism
• coercive isomorphism (there are coercive forces
  from the environment, such as government
  regulations and cultural expectations, which
  impose standardization on organizations)
• mimetic isomorphism (organizations mimic or
  model each other)
• normative isomorphism (takes place as the
  workforce, and especially management, becomes
  more professional-ized)

dr. hab. Jerzy Supernat
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Influence of different factors makes that an
organizational structure takes different forms
and is dynamic. Nevertheless one shouldnt forget
that an organizational structure is for a purpose
and that the purpose is to be as effective as
possible.
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Concluding remark
The achievements of an organization are the
results of the combined effort of each
individual. Vince Lombardi (1913-1970)
dr. hab. Jerzy Supernat