Organizational Theory: Determinants of Structure -------------------------------------------------------------------------------- the Objective Here Is to Understand Why Organizations Have the Structure That They

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Organizational Theory:
Determinants of Structure

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The objective here is to understand why organizations have the structure that they do. By "structure" I mean things like degree and type of horizontal differentiation, vertical differentiation, mechanisms of coordination and control, formalization, and centralization of power. See handouts page for more information on organizational structure.

According to Taylor, Fayol, Weber and other classical theorists, there is a single best way for organization to be structured. Yet organizations vary considerably on structural attributes. The objective of much research has been to understand what determines
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Chick Perrow '67 looked at how the frequency and type of exceptions that occurred during production affected structure. Two types of exceptions: (a) can be solved via orderly, analytic search process (like mechanic fixing car), (b) no analytic framework, rely on intuition, guesswork (like advertising, film-making, fusion research).

Few Exceptions Many Exceptions
Un-analyzable pottery, specialty glass, motel room artwork; plumbing; computer technical support (craftwork) routine work, but when problems crop up, it is hard to figure what to do film making; aerospace; (non routine research) tasks that no one really knows how to do: work on intuition, implicit knowledge
Analyzable routine, like screws; (routine manufacturing) the few problems that occur are usually easy to understand custom machinery, building dams; (engineering production) the application of well-known principles and technologies to lots of new and different situations

It turns out that bottom left organizations (analyzable and few exceptions) tend to be highly centralized and formalized -- in short, bureaucracies. Bureaucracies are the best possible organizational form when the task is well-understood, and how to best execute it can be specified in advance.

At the other extreme, the top

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