Organizational Hierarchy > Efficiency: Mechanistic structures
- Centralization
- Top-down chain of command
- Formalization
- Narrow span of control and tall structures with many layers, tight control
- Rigid departmentalization
- High levels of specialization
- Efficiency
Flexibility: Organic structures
- Decentralization
- Cross-hierarchical teams
- Low formalization
- Wide span of control > Flat structures with few layers; loose control
- Cross-functional teams
- Low levels of centralization
Delayering
Removing one or more layers of middle managers
+ Cut the costs of paying many managers
+ Improve communication
+ Empower the remaining workers if they are given extra responsibilities
- Result in a loss of experienced, skilled managers
- Be costly initially in terms of redundancy and training
Two different organizational structures
- Simple hierarchy: a manager/head department and employees. There is few interaction among employees and employee’s ideas need to be “approved” first.
- Self-organizing team: each employee has the freedom to interact with eachother and take (own) initiatives. Can’t identify who is the head of the unit.
Organizational Matrix
Makes communication within big companies with a strict and layered hierarchy easier.
- Cross-functional managers: build bridges between the functional reporting lines and geographical reporting lines.
Organic multi-functional project teams
Infusing an organic structure within large established companies. The hierarchy stays there but it is more flexible. Project teams within departments are implemented to let employees operate more freely.
Mixed organic/ Hierarchical structure
Brings the traditional hierarchy and matrix together. It’s about the balance between accountability and allowing space for new initiatives.
Paradox: stability and change.
How do you cope with this?
- Outsourcing: ambidexterity (exploration or exploitation)
- Structural (spatial) ambidexterity
- Temporal (sequential) ambidexterity
- Contextual ambidexterity
Structural (spatial) ambidexterity
Separate business units with different designs, cultures, and processes focused on exploration or exploitation
Temporal (sequential) ambidexterity
Alternate sequentially (in line with the innovation cycle) between longer periods of exploitation with shorter periods of exploration
Contextual ambidexterity
A supportive organizational context can enable individuals to choose between alignment and adaptability activities at different times
Structural versus Contextual Ambidexterity
Zie notes lecture 6
Ambidexterity-analysis Fourné et al. (2019)
- Larger organizations: structural ambidexterity
- High-tech environments: structural ambidexterity
- Service organization: contextual ambidexterity
