1. Organisation Structure
The established pattern of relationships among the component parts of the organisation
The features which serve to control or distinguish its parts

2. Formal Structure Often Described In Terms Of:
The pattern of formal relationships and duties - charts, job descriptions, etc.
The way in which the various activities or tasks are assigned to differentiate departments and/or people - differentiation
The way in which separate activities or tasks are co-ordinated -integration
The power, status, and hierarchical relationships within the organisation - the authority system
The planned and formalised policies and procedures and controls that guide the activities and relationships of people in the organisation - the administrative system

3. Differentiation
The state of segmentation of organisational systems into components.
Vertical differentiation:- decision making and authority at different levels in the organisation
Horizontal differentiation:- tasks; units, etc, differences at the same level of hierarchy

4. Integration
The degree of co-ordination and control which exists between the various levels and activities of the organisation.
Conventional integration mechanisms:- rules, policies, procedures, hierarchical referral
Non-conventional integration mechanisms - management into-systems, integrator roles, cross functional teams, re-organisation into a matrix structure

5. Co-Ordination Mechanisms
Mutual adjustment
Direct supervision
Standardisation:
work processes
outputs
skills and/or knowledge
norms or values
necessary because of differentiation and division of labour

6. Basic View Of "Strategy-Structure" Relationship
“fit”

7. Crucial Elements Of Chandlers Thesis
1. Organisation structure follows the growth strategies of the firm.
2. USA firms had followed a stage or stepwise process of development of strategies and structures.
3. Organisations do not change their structures until provoked by inefficiencies to do so.
4. Added later by Drucker and Miles and Snow:
"structure constrains strategy".

8. Organisational Design Variables
Product/market policies
Task
uncertainty
diversity
interdependence
People
recruitment, selection
transfer & promotion
training & development
Structure
division of labour
departmentalisation
shape
distribution of power
Reward Systems
compensation
promotion
leadership style
job design
Information & Decision Processes
planning & control
budgeting
integration mechanisms
performance measures
Success

9. Approaches To Organisational Design
The One Best Way Approach
e.g. scientific management, bureaucracy, administrative management, management by objectives, long range planning, organisational development and so on.
All organisations should be of the same design.
The Contingency Approach
e.g. it all depends upon the situation facing the firm.
The situation determines the design.
The Configuration/Context Approach
e.g. design parameter and situational factors cluster together into internally consistent groupings.
Design and situation relationship is symbiotic not deterministic.

10. Organisation Design (1)
Individual positions
job specialisation
behaviour formalisation
training
indoctrination
The skeletal structure
bases for establishing groupings
function/activity
knowledge, skill, process, function
market
output, client, place
(time may be a sub category of either)
size of units

11. Organisation Design (2)
Design of lateral linking devices
liaison devices
planning and control systems
Design of decision making systems
centralised
decentralised

12. Basic Contingency Model
Organisation
Design
Organisation
Effectiveness
Organisation
Environment

13. Situational Factors (1)
Perception of environment
Age
of industry
different configurations favoured at different times.
of organisation
increasing age increasing formalisation
Size of organisation
growth leads to increasing average unit size, increasing formalisation, more elaborate configuration

14. Situational Factors (2)
Technical system in operating core
regulatory systems
formalisation and bureaucracy
complexity
elaborate administrative system and selective decentralisation
automation
organic administrative systems
Power
increasing external control, centralisation & formalisation
individuals favour centralisation
fashion overrides common sense

15. Why Do Configurations Exist?
The ”Darwinian" Perspective
survival of the fittest
The ”Harmony” Perspective
consistency, synergy, strategic fit
The ”Quantum Leap” Perspective
approach to strategic change

16. Six Basic Elements Of The Organisation
the strategic apex
the middle line
the technostructure
the support staff
the operating core
the ideology

17. Six Basic Elements Of The Organisation

18. Six Structural Configurations
the simple structure
pull to centralise
the machine bureaucracy
pull to standardise
the professional bureaucracy
pull to professionalise
the divisionalised form
pull to balkanise
the adhocracy
pull to collaborate
the missionary
pull to evangelise

19. The Simple Structure (1)
Key co-ordinating mechanism
direct supervision
Key element
strategic apex

20. The Simple Structure (2)
Design parameters
Specialisation - little
Training - little
Indoctrination - little
Formalisation of behaviour - little
Style - organic
Groupings - functional
Unit size - wide
Planning and control - no formal systems
Liaison devices - few
Decision making power - centralised
Situational factors
Age and size - young and small
Technical system - simple, not regulatory
Environment - simple, dynamic (hostile?)
Power source - Managing Director authority and control

21. The Entrepreneurial Context (1)
Dominated by a single individual, with clear and distinct mission, directing a responsive organisation
new organisations
small organisations
crisis organisations
autocratic organisations
charismatic organisations
entrepreneurial organisations
The Simple Structure

22. The Entrepreneurial Context (2)
Environment tends to be:
simple
dynamic
nichés in existing fragmented mature industries
Advantages
centralisation
strong ideology
effective in some situations
Disadvantages
confusion
inefficient
vulnerable to loss of leader
narrow environment range
leader resists change
abuse of authority

23. The Machine Bureaucracy (1)
Key co-ordinating mechanism
standardisation of work
Key element
technostructure

24. The Machine Bureaucracy (2)
Design parameters
Specialisation - high; vertical & horizontal
Training - little
Indoctrination - little
Formalisation of behaviour - high
Style - bureaucratic
Groupings - functional
Unit size - wide in operating core, narrow elsewhere
Planning and control - action planning
Liaison devices - few
Decision making power - limited horizontal decentralisation
Situational factors
Age and size - old and large
Technical system - simple, not automated or sophisticated
Environment - simple, stable
Power source - technocratic and external

25. The Machine Bureaucracy
The Mature Context (1)
An integrated set of simple, repetitive tasks must be performed precisely and consistently by human beings
Found in:- older mature organisations with regulatory technical systems.
Strong external control by dominant stakeholder
Regulatory functions
Safety conscious organisations
The Machine Bureaucracy

26. The Mature Context (2) Environment tends to be: simple stable
demanding mass provision of goods and services
Disadvantages
boring, repetitive work
inflexibility
conflict
limited scope of personal development
Advantages
control / accuracy
certainty / precision
efficiency (?)

27. The Professional Bureaucracy (1)
Key co-ordinating mechanism
standardisation of skills
Key element
operating core

28. The Professional Bureaucracy (2)
Design parameters
Specialisation - high in horizontal plane
Training - high
Indoctrination - little
Formalisation of behaviour - little
Style - bureaucratic
Groupings - functional and market
Unit size - wide in operating core, narrow elsewhere
Planning and control - little
Liaison devices - roles in administration
Decision making power - horizontal decentralisation
Situational factors
Age and size - variable
Technical system - not regulatory or sophisticated
Environment - complex and stable
Power source - professional operator control

29. The Professional Context (1)
Organisations designed to deal with stable yet high complex working patterns
Organisations tend to be:
public service
personal service orientated
missing regulatory, sophisticated or automated technical systems
strong operating core & support staff bases
The Professional Bureaucracy

30. The Professional Context (2)
Environment tends to be:
stable
complex
Disadvantages
lack of control
co-ordination difficulties
discretion over use of standard programmes
innovation
inflexibility
Advantages
Democratic
provides extensive autonomy

31. The Divisionalised Form (1)
Key co-ordinating mechanism
standardisation of outputs
Key element
middle line

32. The Divisionalised Form (2)
Design parameters
Specialisation - high in horizontal and vertical plane
Training - little
Indoctrination - some in key roles
Formalisation of behaviour - high
Style - bureaucratic
Groupings - market
Unit size - wide at top
Planning and control - high performance control
Liaison devices - few
Decision making power - limited vertical integration
Situational factors
Age and size - old and very large
Technical system - divisible, often mirroring machine bureaucracy
Environment - diverse
Power source - middle line control

33. The Diversified Context (1)
A set of quasi-autonomous units coupled together by a central administrative structure
Organisations have diverse markets created by product/service or client or regional segmentation.
Client and regional segmentation encourages superimposition of machine bureaucracy in operating core
Technical system divisible into efficient units.
Larger, older firms.
The Divisionalised Form

34. The Diversified Context (2)
Environment tends to be:
multiple
simple
static
Advantages
strategic flexibility
efficient allocation of capital
helps personal development
spreads risk
responsiveness
Disadvantages
expensive duplication
lack of central control
extended shareholder grouping
lack of synergy
quantitative performance measures

35. The Adhocracy (1) Key co-ordinating mechanism mutual adjustment
Key element
support staff

36. The Adhocracy (2) Design parameters Situational factors
Specialisation - high in horizontal plane
Training - high
Indoctrination - some
Formalisation of behaviour - little
Style - organic
Groupings - functional and market
Unit size - narrow
Planning and control - limited action planning
Liaison devices - many and various
Decision making power - selective decentralisation
Situational factors
Age and size - young
Technical system - sophisticated and automated or simple and non-regulatory
Environment - complex and dynamic
Power source - expert control

37. The Innovation Context (1)
Organisations designed to deal with complex technologies and systems under conditions of severe dynamism.
Organisations tend to be:-
operating adhocracy
administrative adhocracy
entrepreneurial adhocracy
competitive adhocracy
temporary adhocracy
mammoth project adhocracy
automated adhocracy
Young organisations - age breeds standardisation
The Adhocracy

38. The Innovation Context (2)
Environment tends to be:
dynamic
complex
Advantages
copes with difficult conditions
provides challenges
very effective
Disadvantages
confusion and ambiguity
inefficient
internal politics and conflict
group goals must dominate
unbalanced workloads
drift towards other configurations

39. The Missionary Organisation (1)
Key co-ordinating mechanism
standardisation of norms
Key element
ideology

40. The Missionary Organisation (2)
Design parameters
Specialisation - little
Training - little
Indoctrination - high
Formalisation of behaviour - little
Style - bureaucratic
Groupings - market
Unit size - wide
Planning and control - little
Liaison devices - few
Decision making power - decentralised
Situational factors
Age and size - middle range
Technical system - simple and non-regulatory
Environment - simple, usually stable
Power source - ideological control

41. Configurations as One System
Simple Structure
Ageing
Professionalism
complexity
hostility
hostility
complexity
Machine Bureaucracy
Professional Bureaucracy
rationalisation
automation
sophistication
dynamism
diversification
hostility
Ageing / success
success in one area
consolidation
complexity
fragmentation
Divisionalised Form
Adhocracy
dynamism

42. A Portfolio Of Configuration At The Business Level
Stars
simple structures
Question Marks
adhocracies or
simple structures
Cash Cows
machine or
professional bureaucracies
Dogs
machine or
professional bureaucracies
R & D
adhocracies