Mechanistic versus Organic Structures a. Mechanistic Structure is appropriate for organizations focusing on a cost- minimization strategy through tight control, extensive division of labor, high formalization and centralization. The information network is limited and employees rarely participate in decision making process. b. Organic Structure is decentralized and has low complexity and formalization. It has an extensive information system, and employees rarely participate in decision making. It tends to be flexible and adaptive. c. Structure in function of the organization’s fundamental strategy. ) Innovation Strategy focuses on developing important new product or services. An organic structure provides the flexibility for this strategy. 2) Cost-minimization Strategy imposes tight controls over expenses and reduces product prices. The mechanistic structure is appropriate. 3) Imitation strategies are not adopted by true innovators but rather by organizations that move into new markets after smaller competitors have demonstrated the potential for success. Limitation best suited to a structure that combines mechanistic and organic. d. Structure is also a function of 1) Size.
Larger organizations tend to be mechanistic because greater formalization is needed. Strategies also change as sizes changes. Growing organizations often expand activities within their industry. 2) Technology. An organic structure may be best for coping with non-routine technology because formalization is low. 3) Environment. In general, the more stable the environment, the more mechanistic the organization. A mechanistic structure is appropriate when the environment has little capacity for growth. Dynamic environments require an organic structure because of their unpredictability.
Moreover, a complex environment also requires the flexibility and adaptability of an organic structure. a) The environment has three key dimensions: i) Capacity is the degree of growth an environment can support. ii) Volatility concerns the relative instability in the environment. iii) Complexity is the amount of heterogeneity and concentration in the environment. Thus, an industry with few very large firms is homogeneous and concentrated. b) Uncertainty not a specific environmental factor. The foregoing factors determine the level of uncertainty present in the environment. 11.
According to Henry Mintzberg, an organization has five components. Depending on which is in control, one of five different structure involve. a. The five organizational components include the 1) Operating core- workers who perform the basic tasks related to production 2) Strategic apex- top managers 3) Middle line- managers who connect the core to the apex 4) Technostructure- analyst who achieve a certain standardization 5) Support staff- indirect support services b. The five structures include the following: 1) Simple structure (apex) has low complexity and formality and authority is centralized.
Its small size and simplicity usually precludes significant inefficiency in use of resources. 2) Machine bureaucracy (technostructure) is a complex, formal and centralized organization that performs highly routine tasks, groups’ activities into functional departments, has relationships. 3) Professional bureaucracy (operating core) is a complex and formal but centralized organization in which highly trained specialist have great autonomy. 4) Divisional structure (middle line) is essentially a self-contained organization.
It is characterized by substantial duplication of functions compared with more centralized structures. 5) Adhocracy (support staff) has low complexity, formality and centralization. Vertical differentiation is low and horizontal differentiation is high. 12. Centralization and Decentralization a) Centralization concerns the centralization of authority in an organization and the degree and levels at which it occurs. b) Decentralization is a philosophy of organizing and managing. Careful selection of which decisions to push down the hierarchy and which to hold at the top is required.
The degree of decentralization will be greater if 1) More decision are made lower in the management hierarchy. 2) Some important decisions are made lower in the management hierarchy. 3) More functions are affected by decisions made at lower levels. 4) Fewer approvals are required before implementation of a decision. c) Centralization and decentralization are relative terms. Absolute centralization or decentralization is impossible. d) The degree of centralization or decentralization depends upon the situation. 1) Information. Decisions cannot be decentralized to those who do not have necessary information. ) Ability. Decisions cannot be decentralized to people who do not have training, experience, knowledge or ability to make decisions. 3) Timeliness. The organization should decentralize decisions requiring a quick response to those near the action. 4) Degree of coordination. The organization cannot decentralize below the level at which coordination must be maintained. 5) Significance of decision. Decisions cannot be centralized to lower levels if they are of critical importance to the organization. 6) Morale. The organization should decentralize, when possible, for the positive influence on morale.