Organizational Theories
As I begin to study organizational theory and design, I join the decades long conversation through the papers and works of many scholars. This aims to be a placeholder for the collection of various theories and concepts I discover along the way.
Organizational design is largely concerned with how we divide — or differentiate — our work (e.g., departments, teams) and how we reforge connections between — or integrate — divisions (Lawrence & Lorsch 1967). I came across this bit from Phanish Puranam:
The approach I take to understanding organization design can be called “micro-structural”. Its two key tenets are: 1)Large, complex organizations can be understood as aggregations of a few basic recurring “micro-organizational structures" and 2) the fundamental processes of interest in these micro-structures pertain to dis-aggregation and re- aggregation - namely division of labour, and integration of effort.
It has been said that the problem of organizational design is the "integration of subtasks around the completion of a global task" (Galbraith, 1974)
Purposes of this work includes:
- Explanation of organizational performance (Lawrence & Lorsch, 1967)
- Identification of strategies and their associated costs (Galbraith, 1974)
Structure
Mintzberg (1979, p. 2) defines structure as:
The structure of an organization can be defined simply as the sum total of the ways in which it divides its labor into distinct tasks and then achieves coordination among them."
Galbraith
Contingency Theory
As opposed to a single ideal or best way to structure, contingency theory considers the dynamics of a firm and its environment and the design that best accounts for those factors — or as Weigelt & Miller put it:
A contingency theory proposes that performance outcomes of an organizatonal unit are a result of the fit between the unit's external context and internal arrangements. (2013, p. 394)
At what seems to be its most broad, they see contingency theory as 'any proposition that contains a moderating variable' (Weigelt & Miller, 2013).
References
Galbraith, J.R. (1974) Organization Design: An Information Processing View. Interfaces, Vol. 4, No. 3, pp. 28-36.
Lawrence, P.R., & Lorsch, J.W. (1967) Differentiation and Integration in Complex Organizations. Administrative Science Quarterly, Vol. 12, No. 1, pp. 1-47.
Weigelt, C., & Miller, D.J. (2013). Implications of internal organization structure for firm boundaries. Strategic Management Journal, 34, 1411-1434.
This post is an on-going work and will be updated from time to time.