How should companies organize themselves into separate units so as to be most effective? This question is a challenging and very important one for today’s organizations. Experts in the field of organizational behavior have provided insight into the matter by studying what is called organizational structure—the way individuals and groups are arranged with respect to the tasks they perform—and organizational design—the process of coordinating these structural elements in the most effective manner. As you may suspect, finding the best way to structure and design organizations is no simple matter. However, because understanding the structure and design of organizations is so key to fully appreciating their functioning, organizational scientists have devoted considerable energy to this topic.
To begin, we will describe why structure and design matter in organizations. We will then note how various factors influence the design of an organization. Then, we introduce and compare mechanistic and organic systems and show how each type reflects a basic design decision. Next, we describe some of the traditional ways organizations have structured themselves. Finally, we discuss new forms of organizing that are highly adaptive and cost efficient and intended to respond to the demands of a changing world of work.
As suggested earlier, organizational structure refers to how an organization is put together. But it isn’t only about how jobs or departments are