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Adaptive Organization Structures

     The use of bureaucratic structures has begun to decline. One reason for this decline is that the inherent assumptions underlying bureaucracy are unrealistic. The organization cannot function with mechanical rules and regulations that have limited value in motivating and leading the modern worker.

     In overcoming bureaucratic deficiencies, many firms are turning to adaptive organization structures, new designs based on a number of assumptions. One such assumption is that the organization operates in a dynamic environment. A second is that personnel, task, and environment are related and must be fit together properly for the best structure and output. This chapter initially' directed attention to the impact of technology and its effect on organizational personnel, from the workers right up to the managers. At the worker level, technology affects social relationships as well as job content. At the managerial level, it encourages greater integration of colleagues and of planning effort.

     Technology also affects the organization structure by causing changes in such factors as the length of the line of command, the span of control of the chief executive, and the ratio of managers to total personnel. In addition, mechanistic designs tend to give way to organic ones, as has been seen in the research of Woodward, Zwerman, Lawrence and Lorsch, and Meyer, to name only five prominent researchers in the organization-study boom of recent times.

     What do these new organic structures look like? How do they work? Exactly when are they used? These questions are answered through examinations of project, matrix, and free-form designs. The project organization form entails "the gathering of the best available talent to accomplish a specific and complex understanding within time, cost and/or quality parameters, followed by the disbanding of the team upon completion of the undertaking. Project organization has been employed in numerous and diverse ways, from building dams and weapon systems to conducting research and development and designing bank credit-card systems. The major advantage of' this organizational form is that it allows conducting research and development and designing bank credit-card systems. The major advantage of this organizational form is that it allow's the project manager and team to concentrate their attention on one specific undertaking.

     The matrix structure is a hybrid form of organization, containing characteristics of both project and functional structures. In a matrix design, employees are in a sense on partial loan to the matrix project manager. These employees, therefore, have a dual responsibility-to the line manager who lent them to the project and to the project manager for whom they work for the life of the project. The result is a uniquely horizontal and vertical flow of authority. Since the project manager has only project authority, this individual must rely on human relations assets and skills-for example, negotiation, personality, persuasive ability, the aura of competence, and the brokering of reciprocal favors. While the matrix structure has advantages, the organization considering its use must also weigh the disadvantages inherent in it. Only after considering both aspects of the matrix can an organization make an intelligent decision regarding its overall value.

     Another adaptive organization design is the free-form, or organic, structure. This design can take any shape, but it always has two prime characteristics: the downplay of rigid bureaucratic rules and an emphasis on self-regulation. A number of conglomerates have adopted this organization form. There are four basic models of matrix structures: project, product-function, product-region, and multidimensional. Perhaps the greatest advantage of a free-form structure is its value to the manager who must cope with change.

     What kind of structure is best? The question has no single right answer. "Best" depends on the situation. For that reason, the area of contingency organization design is currently very important. Some firms need a mechanistic structure; others work better with an organic one. The answer to the question thus depends on forces operating on managers, subordinates task and environment.

     This chapter has examined the ways in which organizations are redesigning their structures in order to adapt more effectively to their environments. However, the organizing process only helps bring together the workers and the work. Management still needs a basis for comparing the plan and the results. This subject is discussed in the next chapter.