Organizational Design
Video 9A
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Learning Objectives
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Differentiate between mechanistic and organic
structures
Describe contingency factors affecting
organizational design
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Mechanistic vs. Organic
Organizations
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Mechanistic characterized by…
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Highly specialized tasks
Formal rules, regulations, policies
Centralized decision making
Communication flows top down
Vertical structure (tall org chart)
Relies heavily on authority
Ex: Centcom (central command)
Organic characterized by…
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Jobs are less standardized
Fewer rules and regulations
Decentralized decision making
Communication flows freely
Horizontal structure (flat org chart)
Relies heavily on expert power
What type of organization
would you prefer?
Please complete the Supplemental Activity entitled
“Organizational Design Preference”
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Contingency Factors
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Question—To what degree should an
organization be organic or mechanistic?
Contingency Variables
Strategy
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Strategies which have element of risk, demand flexibility etc
require organic structures
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Ex: Diversification, Integration strategies
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Strategies which maintain the status quo or require tight
control fit nicely in mechanistic organizations
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Ex: Stability, cost leadership strategy
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Environment
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Uncertain environments call for organic structures
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Stabile environments call for mechanistic structures
More tolerable to change—better equipped to handle change
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Rules work nicely here due to higher degree of predictability
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Contingency Factors Continued…
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Contingency Variables
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Size of the Organization
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Small companies tend to be more organic. Have…
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Little division of labor
Few established rules, policies
Large companies tend to be more mechanistic.
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Higher degree of specialization
Well established rule, policies, reporting relationships
Ex: Some large universities have become mechanistic
Contingency Factors Continued…
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Contingency Variables
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Age of Organization (Life Cycle)
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Birth (Very Organic)
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Youth (Somewhat Organic)
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Hires more employees, tasks are more defined and broken
down
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Midlife (Organic/Mechanistic)
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Maturity Stage (Very Mechanistic)
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Very little staff, procedures, tasks are not specialized
Extensive rules, procedures, systems defined
Extremely bureaucratic
Many companies must downsize to survive
Technology
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Unit production technology=designing to customer
specs=need to be flexible=organic
Mass production technology=designing standardized
product=more reliance on rules of conformity=mechanistic
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