Organizational Culture, Structure, and Design
CHAPTER 8
257
8.4
MAJOR
QUESTION
Organizational Structure
How are for-profit, nonprofit, and mutual-benefit organizations structured?
THE BIG PICTURE
The organizational structure of the three types of organizations-for-profit, nonprofit, and mutual-benefit-
may be expressed vertically or horizontally on an organization chart.
Once an organization's vision and strategy have been determined, as we stated at the
beginning of this chapter, the challenge for top managers is, first, to create a culture
that will motivate its members to work together and, second, a structure that will coor-
dinate their actions to achieve the organization's strategic goals. Here let us begin to
consider the second part—an organization's structure.
In Chapter 1, we defined an organization as a group of people who work together to
achieve some specific purpose. According to Chester I. Barnard's classic definition,
an organization is a system of consciously coordinated activities or forces of two or more
people. I By this wording, a crew of two coordinating their activities to operate a com-
mercial tuna fishing boat is just as much an organization as tuna companies Bumble
Bee and StarKist with their thousands of employees.
The Organization: Three Types
As we stated in Chapter 1, there are three types of organizations classified according
to the three different purposes for which they are formed:82
For-profit organizations. These are formed to make money, or profits, by
offering products or services.
• Nonprofit organizations. These are formed to offer services to some clients,
not to make a profit (examples: hospitals, colleges).
Mutual-benefit organizations. These are voluntary collectives whose pur-
pose is to advance members' interests (examples: unions, trade associations).
Who sells the electricity? About
80% of U.S. drivers drive 40 miles
or less a day, and the Ford Focus
Electric can drive nearly twice that
far, 76 miles, on a single electric
charge. The focus is made by
Ford Motor Company, a for-profit
organization. What kind of
organizations might sell the
electricity and the charging
stations-for-profit, nonprofit, or
mutual-benefit? Lucas Jackson
Reuters/Alamy
cd2
Organizational Culture, Structure, and Design
CHAPTER 8
255
8. Rewards, Titles, Promotions, and Bonuses
Rewards and status symbols are among the strongest ways to embed organizational
culture.
Example: At Triage Consulting Group, employees at the same level of their career
earn the same pay, but employees are eligible for merit bonuses, again reinforcing
the culture of achievement. The awarding of merit bonuses is partly based on co-
workers' votes for who contributed most to the company's success, and the employ-
ees who receive the most votes are recognized each year at the company's “State of
Triage” meeting.75
9. Organizational Goals and Performance Criteria
Many organizations establish organizational goals and criteria for recruiting, selecting,
developing, promoting, dismissing, and retiring people, all of which reinforce the
desired organizational culture.
Example: Las Vegas-based Zappos, the online shoe retailer, spends a great deal of
time analyzing applicants to see if they will fit into its clan-based culture. “We spend
seven to 10 hours (with potential recruits) over four occasions at happy hours, team
building events, or other things outside the office," says the company's human resources
director. “We can see them, and they can us."76 Until recently, this careful selection pro-
cess along with paying full employee benefits and emphasizing having fun at work (the
“wow factor”) resulted in a low turnover rate of only 20% in 2009, a remarkable statistic
for call centers. That figure changed when Zappos instituted a new form of organization,
as we'll describe.
Kids Slippers
The wow culture. The "wow" factor that encourages
Zappos's clan-based culture is partly created by
encouraging employees to have fun at work. Is this a
place you could stick with? Jared McMillen/Aurora
Photos
☺
10. Measurable and Controllable Activities
An organization's leaders can pay attention to, measure, and control a number of ac-
tivities, processes, or outcomes that can foster a certain culture.
Example: Adam Nash, the CEO of Wealthfront, an online financial management
firm, believes that how you keep score on employee progress is important. “If you
don't give people metrics [methods of measurement],” he says, “smart people will
make up their own,” and “you'll get incessant fighting and arguments.”77
256
PART 4
| Organizing
11. Organizational Structure
The hierarchical structure found in most traditional organizations is more likely
to reinforce a culture oriented toward control and authority compared with the
flatter organization that eliminates management layers in favor of giving
employees more power.
Example: The hierarchical structure of a railroad provides a much different culture
from that of the "spaghetti organization” formerly employed by Danish hearing aid
maker Oticon, in which employees worked at mobile desks on wheels and were always
subject to reorganization. Zappos has gone further by instituting a radical experiment
called holocracy, which is supposed to encourage collaboration by eliminating work-
place hierarchy—no titles and no bosses. Unfortunately, employees weren't sure how
to get things done anymore, which resulted in such confusion that the company's 2015
turnover rate went from 20% to 30%.7
12. Organizational Systems and Procedures
Companies are increasingly using electronic networks to increase collaboration among
employees, to increase innovation, quality, and efficiency.
Example: Molson Coors CEO Peter Swinburn, in knitting together employees of sev-
eral former companies, made sure they had better tools to interact with each other. One
technology he introduced was Yammer, a website for short messages similar to Twitter,
on which some 2,000 employees now provide updates and collaborate on projects. 79
Don't Forget about Person-Organization Fit
Now that we have described the four key types of organizational culture and the mech-
anisms managers can use to change culture, it's time to reflect on your person-organi-
zation (PO) fit. Recall that PO fit reflects the extent to which your personality and
values match the climate and culture in an organization. Your PO fit matters because it
links to your work attitudes and performance. So
We have two activities for you to complete to measure your level of fit and see what
you can do about it. The first is Self-Assessment 8.2, which measures your preference
for the four types of culture in the CVF. The second is to answer the discussion ques-
tions associated with this assessment. You will be asked to conduct a gap analysis be-
tween the culture for a current or past employer and your preferred culture type. You
can use this gap to make a plan of action for improving your PO fit.
e connect SELF-ASSESSMENT 8.2
Assessing Your Preferred Type of Organizational
Culture
This survey is designed to assess your preferred type of or-
ganizational culture. Please be prepared to answer these
questions if your instructor has assigned Self-Assessment
8.2 in Connect.
1. In rank order, what are your preferred culture types? Are
you surprised by the results?
2. Compute the gap between your preferred and actual
culture types by subtracting your actual culture type
score (Self-Assessment 8.1) from your preferred type
score (Self-Assessment 8.2). Where are the largest
gaps?
3. Make a plan to improve your person-organization fit.
Focusing on your two largest culture types, identify what
is causing the gaps. You will find it helpful to look at the
survey items that measure these types.
4. Now use the 12 embedding mechanisms just discussed
and suggest at least two things you can do to improve
your level of fit.
254
PART 4
| Organizing
Example: Until a decade ago, major drug companies treated countries in the
developing world as not worth the trouble of marketing to. But Andrew Witty,
who in 2008 at age 43 became the youngest CEO of GlaxoSmithKline, the world's
second-largest pharmaceutical company, is making a name for himself by doing
more for the poor people of the world than any other big drug company leader.
While working in poor countries, Witty found “just unbelievable energy to self-
improve, to lift themselves up.” He has promised to keep prices of drugs sold in
poor countries to no more than 25% of what is charged in rich ones and to donate
one-fifth of all profits made in such countries toward building their health sys-
tems. Now for four years running Glaxo has been ranked No. 1 on the Access to
Medicine index, which rates pharmaceutical companies on their stances toward
the poor.70
5. Leader Reactions to Crises
How top managers respond to critical incidents and organizational crises sends a clear
cultural message.
Example: Cory Booker (now a U.S. senator from New Jersey) was the mayor of fi-
nancially struggling Newark in 2010 when a serious snowstorm hit the city. “Through-
out the storm," reports The Wall Street Journal, “those in distress hit up Mr. Booker on
Twitter, one of the mayor's preferred methods of keeping in touch with residents. After
they cried out for plows, ambulances, and diapers, he responded, electronically and
sometimes by driving to the location, shovel in hand. ... He ordered his driver to pull
over several times to help shovel out or push cars.”71 His on-the-ground efforts were an
answer to critics who accused him of being out of touch.
6. Role Modeling, Training, and Coaching
Many companies provide structured training to provide an in-depth introduction to
their organizational values.
Example: Triage Consulting Group, a health care financial consulting firm in
California, places a high value on superior performance at achieving measurable
goals. New employees are immediately prepared for this culture with a four-day
orientation in Triage's culture and methods, followed by 15 training modules
scheduled in six-week intervals. After less than a year, the best performers are
ready to begin managing their own projects, furthering their career development.
Performance evaluations take place four times a year, further reinforcing the drive
for results. 72
7. Physical Design
There is constant experimenting going on as to the best office layout that will encour-
age employee productivity and send a strong message about the culture.
Example: After power producer Dynegy emerged from bankruptcy, the new CEO
abandoned his private office and moved into a 64-square-foot cubicle—identical to the
ones used by the 235 other employees—signaling his aim “to transform a business
previously focused on day-to-day survival into an agile operator poised for growth,”
according to one report."
Another example: Pharmaceutical company GlaxoSmithKline has embraced an
open-space philosophy that abandons individual desks in favor of “hoteling," where
everyone is assigned to “neighborhoods,” or areas of workers engaged in related tasks
(you store your personal belongings in a small locker), on the theory that chance en-
counters among employees will spark conversations and collaboration.74
Organizational Culture, Structure, and Design
CHAPTER 8
253
8.3
MAJOR
QUESTION
The Process of Culture Change
What can be done to an organization's culture to increase its economic performance?
THE BIG PICTURE
There are 12 ways a culture becomes established in an organization.
A particular culture can become embedded in an organization in many ways, 12 of
which are described here. (See Table 8.2.)
Changing organizational culture is essentially a teaching process—that is, a process
in which members instruct each other about the organization's preferred values, be-
liefs, expectations, and behaviors. The process is accomplished by using one or more
the following 12 mechanisms.65
TABLE 8.2
A Dozen Ways to Change
Organizational Culture
1. Formal statements
2. Slogans & sayings
3. Rites & rituals
4. Stories, legends, & myths
1. Formal Statements
The first way to embed preferred culture is through the use of formal statements of
organizational philosophy, mission, vision, and values, as well as materials used for
recruiting, selecting, and socializing employees.
Example: At fashion website Polyvore, CEO Jess Lee wrote down three statements
she thought represented the company's distinct culture: (1) “delight the user,” (2) “do
a few things well," and (3) "make an impact."66 Walmart founder Sam Walton stated
that three basic values represented the core of the retailer's culture: (1) respect for the
individual, (2) service to customers, and (3) striving for excellence.67
5. Leader reactions to
crises
6. Role modeling, training,
& coaching
7. Physical design
8. Rewards, titles,
promotions, & bonuses
9. Organizational goals &
performance criteria
2. Slogans and Sayings
The desirable corporate culture can be expressed in language, slogans, sayings, and
acronyms.
Example: David Cote, chairman and CEO of global technology company Honey-
well, has adopted the principle "Your job as a leader is to be right at the end of the
meeting, not at the beginning of the meeting.” That is, a leader's job is to flush out all
the facts and opinions so at the end he or she can make a good decision.68
10. Measurable &
controllable activities
11. Organizational structure
12. Organizational systems
& procedures
3. Rites and Rituals
As we mentioned earlier, rites and rituals represent the planned and unplanned activi-
ties and ceremonies that are used to celebrate important events or achievements.
Example: After a day's meetings with clients, employees at Boston advertising
agency Arnold Worldwide like to meet at a beer-vending machine in the office (nick-
named "Arnie"), where they sip bottles of home-brewed beer, chitchat, and exchange
ideas. Of course, employers need to be cautious about encouraging drinking alcohol
at work, for both health and liability reasons.)
4. Stories, Legends, and Myths
A story is a narrative about an actual event that happened within the organization and
that helps to symbolize its vision and values to employees.
to Fortune. One employee described the culture this way:
"It's authentic. It's not a façade or marketing strategy."131
• Associates have the freedom to encourage, help, and
allow other associates to grow in knowledge, skill,
and scope of responsibility.
• Associates should demonstrate fairness to each other
and everyone with whom they come in contact.
· Associates are provided the ability to make one's
own commitments and are expected to keep them.
. A waterline situation involves consultation with
other associates before undertaking actions that
could impact the reputation or profitability of the
company and otherwise “sink the ship."130
Associates are expected to live by these principles, and
the company spends considerable effort trying to hire peo-
ple who fit into its culture. It is also important to note that
the company does not believe in showering associates
with lavish perks as do many of the other companies listed
on Fortune's list of best companies. The "headquarters
doesn't have foosball tables or napping pods,” according
FOR DISCUSSION
1. Using the competing values framework as a point of
reference, how would you describe the current orga-
nizational culture at Gore? Provide examples to
support your conclusions.
2. Which of the 12 ways to embed organizational
culture has Gore used to create its current culture?
Provide examples to support your conclusions.
3. Which of the three types of organizational design
discussed in the chapter is most similar to Gore's lat-
tice structure? Explain your rationale.
4. Is Gore's structure more organic or mechanistic? Explain.
5. What is the most important lesson from this case?
Discuss.
Legal/Ethical Challenge
One woman told a reporter that there was an unwrit-
ten requirement at her employer that “employees were
expected to spend extra money and time on group
lunches and twice-weekly drinks. This kind of socializ-
ing was necessary in order to get ahead.” She was not
told about the requirement during the hiring process, and
she now feels a lack of fit. Her problem with the expecta-
tion is that she has two children to pick up from school
and she tries to save money by taking her lunch to work.
In a recent performance appraisal, she was told "I needed
to be more of a team player.” Her feedback was partly
based on her lack of socializing outside of work. 133
Should Socializing outside Work Hours
Be Mandatory?
Person-organization fit reflects the extent to which
someone's personality and values match, or fit, an orga-
nization's culture and climate. Good fit is important for
both employees and organizations. This challenge in-
volves the cultural considerations of asking employees
to socialize outside work hours. If socializing outside
work is an expectation of new hires, then it becomes
something to consider when applying for jobs.
Why would companies ask employees to socialize
outside of work hours? There are a number of good rea-
sons: (1) fostering comfort and relaxation among
employees, (2) helping people de-stress after a hard day,
(3) learning more about one's colleagues, and (4) build-
ing teamwork and unity.132 All of these benefits should
improve interpersonal relationships and potentially
boost productivity and customer service.
If such requests are voluntary, however, then it is
likely that fewer people will show up, thereby reduc-
ing the benefits. People who show up are more likely
be like-minded and share a common race and gen-
der, as well as hobbies, and tastes. Voluntary requests
can thus serve as a subtle way of promoting homoge-
neity rather than diversity.
Moreover, voluntary requests potentially set up a
situation in which people develop unequal social net-
works. This can have unfair career advantages for
those who attend because people discuss work-related
issues at such gatherings. It thus makes some sense to
make it mandatory to socialize outside of work.
Some companies accept this conclusion. Zappos did in
the past, and other companies continue the practice today.
SOLVING THE CHALLENGE
What are your thoughts about making it mandatory to
socialize outside of work hours?
1. I think it's a good idea. The benefits exceed the costs
and I don't agree that it fails to appreciate diversity.
The socializing activities can be varied to fit the val-
ues and needs of diverse employees, thereby sup-
porting diversity
2. I don't like it. What employees do after work hours
is their business and companies should not infringe
on them. Socializing outside work hours should be
voluntary.
3. I believe that employers have no business interfering
with how employees spend time outside of work.
This means that I don't want either voluntary or
mandatory requests about socializing outside of
work hours. If people want to socialize outside work,
let them arrange it on their own.
4. Invent other options.
Organizational Culture, Structure, and Design
CHAPTER 8
277
3. Describe and explain the three levels of organizational
culture.
4. What are five ways in which culture is transmitted
to employees?
5. Name 12 mechanisms by which an organization's
members teach each other preferred values, beliefs,
expectations, and behaviors.
6. What are seven common elements of organizations?
7. Describe the four types of traditional organizational
designs.
8. Explain what is meant by horizontal organizational
designs.
9. What are three designs that open boundaries
between organizations?
10. What are three factors to consider in designing an
organization's structure?
Management in Action
W.L. Gore's Culture Promotes Employee
Satisfaction, Innovation, and Retention
W.L. Gore & Associates was founded in 1958 by
Wilbert (Bill) and Genevieve (Vieve) Gore. The com-
pany started in the basement of their home. Success
transformed the business from the basement to its first
manufacturing plant in 1960. Today, Gore has over
$3 billion in revenue and 10,000 employees working in
offices across 25 countries. It is one of the 200 largest
privately held companies in the U.S. 122
The company is best known for its Gore-Tex water
and windproof fabrics that are used in a variety of out-
door apparel. But the company has expanded its prod-
ucts to include vacuum filters, microwave cable
assemblies, guitar strings, dental floss, acoustic vents
for cell phones, and medical devices.123
The company has been profitable every year since its
foundation and has been ranked on Fortune's “100 Best
Companies to Work For" list every year since 1998. Its
best ranking was as No. 2 in 2005, and it was No. 12 in
2016. Not surprisingly, employees tend to remain at Gore
once hired. The annual turnover rate is about 3%.124
that support team goals. Goals are not dictated from the top
down. Rather, associates establish their own commitments,
and these percolate upward to form corporate forecasts.
High-quality relationships "with each other, with
customers, with vendors and suppliers, and with our
surrounding communities” are essential at Gore. Asso-
ciates are encouraged to "build and maintain long-term
relationships by communicating directly.” Face-to-face
meetings and phone calls are preferred over less rich
media, like e-mail and texting. 127
The company established a set of fundamental be-
liefs to help embed its desired culture:
• Belief in the individual: If you trust individuals and
believe in them, they will be motivated to do what's
right for the company.
· Power of small teams: Our lattice organization
harnesses the fast decision-making, diverse perspec-
tives, and collaboration of small teams.
· All in the same boat: All Gore associates are part own-
ers of the company through the associate stock plan.
• Long-term view: Our investment decisions are based
on long-term payoff, and our fundamental beliefs are
not sacrificed for short-term gain.128
Structure, Culture, and Values Leadership
Conviction
Bill Gore wanted to start a company that was free from
bureaucracy and a command and control style of leader-
ship. He felt that this was the best way to foster creativity,
engagement, and innovation. He was a strong believer in
autonomy and creating an environment in which people
flourished. To support this philosophy, the company estab-
lished a unique organizational structure and cultural values.
Gore's organizational structure is referred to as a team-
based "lattice" organization. There are no traditional orga-
nizational charts, no chains of command, nor predetermined
channels of communication.” Employees, who are all
called associates, are accountable to the member of their
multi-disciplined teams. Teams form in an ad hoc fashion
around perceived "opportunities," and leaders emerge.12
"Leadership opportunities at Gore are based on how
much of a 'followership’ someone has among co-
workers. Gore also uses peer assessments to determine
compensation,” according to Fortune. 126
Associates are "responsible for managing their own
workload" and for independently making commitments
How Does it All Work?
Associates are not hired for specific jobs. Rather, they are
"hired for general work areas. With the guidance of their
sponsors [everyone has a sponsor, whose goal is to help
people succeed] and a growing understanding of opportu-
nities and team objectives, associates commit to projects
that match their skills. ... Sponsors help associates chart
a course in the organization that will offer personal fulfill-
ment while maximizing their contribution to the enter-
prise."129 They do this by actively providing feedback on
performance and personal development and by helping
associates network with others.
Bill Gore also believed in keeping operational facilities
small due to his focus on high-quality interpersonal rela-
tionships. He observed that it was hard to know everyone
once the number of employees at a facility exceeded
150–200 people. The company thus splits up people at a
facility once it reaches this size by creating a new location.
The final piece of the cultural puzzle involves a set
of guiding principles that Bill Gore called freedom,
fairness, commitment, and waterline:
276
PART 4
Organizing
ܒ
POE Management A Practica X
+ v
X
A
0 file:///D:/Downloads/Management%20A%20Practical%20Introduction%208th%20-%20PDF%20eBook.pdf
...
Organizational Culture, Structure, and Design CHAPTER 8
269
square foot. Although its stock price was down somewhat in
2014, it still was up 12-fold since its 2008 recession-era low. 107
YOUR CALL
In designing new products, such as cell phones, the horizontal
design team approach, known as concurrent engineering or
integrated product development, has been found to speed up
design because all the specialists meet at once, instead of
separately doing their own thing, then handing off the result to
the next group of specialists. Why do you think a horizontal de
sign would be better in a retail business such as groceries?
3. Designs That Open Boundaries between
Organizations: Hollow, Modular, and Virtual
Structures
The opposite of a bureaucracy, with its numerous barriers and divisions, a boundaryless
organization is a fluid, highly adaptive organization whose members, linked by Information
technology, come together to collaborate on common tasks. The collaborators may include
not only coworkers but also suppliers, customers, and even competitors. This means that
the form of the business is ever-changing, and business relationships are informal.108
Three types of structures in this class of organizational design are hollow, modular,
and virtual structures.
The Hollow Structure: Operating with a Central Core and Outsourcing Func-
tions to Outside Vendors In the hollow structure, often called the network struc-
ture, the organization has a central core of key functions and outsources other functions to
vendors who can do them cheaper or faster. (See Figure 8.11.) A company with a hollow
structure might retain such important core processes as design or marketing and out-
source most other processes, such as human resources, warehousing, or distribution,
thereby seeming to "hollow out" the organization. 109
Design
studio
Components
assembly
FIGURE 8.11
Hollow structure
This is an example of a personal
computer company that
outsources noncore processes
to vendors.
Sweden
Mexico, Asia
Core of
personal
computer
company
USA
Engineering
company
Distribution
company
Japan
Canada
Accounting
& finance
USA
A firm with a hollow structure might operate with extensive, even worldwide op-
erations, yet its basic core could remain small, thus keeping payrolls and overhead
down. The glue that holds everything together is information technology, along with
strategic alliances and contractual arrangements with supplier companies. An example
of a hollow structure is EndoStim, the medical device start-up we described earlier.
o
WS
os
5:27 PM
4/7/2019
11
ܒ
POE Management A Practica X
+ v
X
A
0 file:///D:/Downloads/Management%20A%20Practical%20Introduction%208th%20-%20PDF%20eBook.pdf
...
Organizational Culture, Structure, and Design |
CHAPTER 8
255
8. Rewards, Titles, Promotions, and Bonuses
Rewards and status symbols are among the strongest ways to embed organizational
culture.
Example: At Triage Consulting Group, employees at the same level of their career
earn the same pay, but employees are eligible for merit bonuses, again reinforcing
the culture of achievement. The awarding of merit bonuses is partly based on co-
workers' votes for who contributed most to the company's success, and the employ-
ees who receive the most votes are recognized each year at the company's “State of
Triage” meeting.75
9. Organizational Goals and Performance Criteria
Many organizations establish organizational goals and criteria for recruiting, selecting,
developing, promoting, dismissing, and retiring people, all of which reinforce the
desired organizational culture.
Example: Las Vegas-based Zappos, the online shoe retailer, spends a great deal of
time analyzing applicants to see if they will fit into its clan-based culture. “We spend
seven to 10 hours [with potential recruits) over four occasions at happy hours, team
building events, or other things outside the office," says the company's human resources
director. "We can see them, and they can us."76 Until recently, this careful selection pro-
cess along with paying full employee benefits and emphasizing having fun at work (the
"wow factor") resulted in a low turnover rate of only 20% in 2009, a remarkable statistic
for call centers. That figure changed when Zappos instituted a new form of organization,
as we'll describe.
Kids Slippers
The wow culture. The "wow factor that encourages
Zappos's clan-based culture is partly created by
encouraging employees to have fun at work. Is this a
place you could stick with? Jared McMillen/Aurora
Photos
☺
10. Measurable and Controllable Activities
An organization's leaders can pay attention to, measure, and control a number of ac-
tivities, processes, or outcomes that can foster a certain culture.
Example: Adam Nash, the CEO of Wealthfront, an online financial management
firm, believes that how you keep score on employee progress is important. “If you
don't give people metrics (methods of measurement]," he says, “smart people will
make up their own," and "you'll get incessant fighting and arguments."
o
WS
os
5:29 PM
4/7/2019
11
ܒ
POE Management A Practica X
+ v
X
A
0 file:///D:/Downloads/Management%20A%20Practical%20Introduction%208th%20-%20PDF%20eBook.pdf
...
272
PART 4
| Organizing
Much of this kind of mundane hotel work exemplifies what British behavioral sci-
entists Tom Burns and G. M. Stalker call a mechanistic organization, as opposed to
an organic organization. 117 (See Table 8.3.)
MECHANISTIC ORGANIZATIONS
ORGANIC ORGANIZATIONS
TABLE 8.3
Mechanistic versus Organic
Organizations
Centralized hierarchy of authority
Decentralized hierarchy of authority
Many rules and procedures
Few rules and procedures
Specialized tasks
Shared tasks
Formalized communication
Informal communication
Few teams or task forces
Many teams or task forces
Narrow span of control, taller structures
Wider span of control, flatter structures
Mechanistic Organizations: When Rigidity and Uniformity Work Best In a
mechanistic organization, authority is centralized, tasks and rules are clearly specified, and
employees are closely supervised. Mechanistic organizations, then, are bureaucratic, with
rigid rules and top-down communication. This kind of structure is effective in certain as-
pects of hotel work because the market demands uniform product quality and cleanliness.
In general, mechanistic design works best when an organization is operating in a
stable environment. Yet new companies that have gone through a rough-and-tumble
start-up period may decide to change their structures so that they are more mechanis-
tic, with clear lines of authority.
Organic Organizations: When Looseness and Flexibility Work Best In an
organic organization, authority is decentralized, there are fewer rules and procedures, and
networks of employees are encouraged to cooperate and respond quickly to unexpected tasks.
Tom Peters and Robert Waterman called this kind of organization a "loose" structure. 118
Organic organizations are sometimes termed "adhocracies” because they operate on an
ad hoc basis, improvising as they go along. As you might expect, information-technology
companies favor the organic arrangement because they constantly have to adjust to techno-
logical change. New York-based Dark Arts Consulting, a technology consulting firm, has
used the practice of co-working-sharing office space with other businesses to expand
into territories in New Jersey and Pennsylvania, enabling it to hire salespeople and engi-
neers without having the added expense of an underutilized office.119 Companies that need
to respond to fast-changing consumer tastes also favor organic arrangements.
No doubt you would be more comfortable in some organizational structures than
others. If you value autonomy and the chance to make decisions, you probably prefer a
hollow or virtual structure as opposed to one that is more structured. What type of
structure do you think would bring out the best in you?
E connect SELF-ASSESSMENT 8.3
Assessing Your Organizational Structure
Preference
This survey is designed to assess your preferred type of organiza-
tional structure. Please be prepared to answer these questions if
your instructor has assigned Self-Assessment 8.3 in Connect.
1. Do you prefer a more mechanistic or organic structure?
What do you think is the cause for this preference?
2. If you were interviewing for a job, what questions might
you ask to determine if the company is more mechanistic
or organic?
o
WS
os
5:26 PM
4/7/2019
11
Purchase answer to see full
attachment