This document discusses several theories about how organizations structure themselves in response to their environment. It describes Lawrence and Lorsch's seminal research showing that industries with more uncertain environments developed more differentiated internal structures to address different sub-environments. Population ecology views organizations as fitting between their structural and environmental characteristics through variation, selection, and retention. Institutional theory examines how organizations conform to norms and values in their environment through coercive, normative and mimetic pressures. The document also discusses how environmental dimensions like stability/dynamics and complexity relate to organizational dimensions like specialization, formalization, and centralization.
This document discusses several theories about how organizations structure themselves in response to their environment. It describes Lawrence and Lorsch's seminal research showing that industries with more uncertain environments developed more differentiated internal structures to address different sub-environments. Population ecology views organizations as fitting between their structural and environmental characteristics through variation, selection, and retention. Institutional theory examines how organizations conform to norms and values in their environment through coercive, normative and mimetic pressures. The document also discusses how environmental dimensions like stability/dynamics and complexity relate to organizational dimensions like specialization, formalization, and centralization.
This document discusses several theories about how organizations structure themselves in response to their environment. It describes Lawrence and Lorsch's seminal research showing that industries with more uncertain environments developed more differentiated internal structures to address different sub-environments. Population ecology views organizations as fitting between their structural and environmental characteristics through variation, selection, and retention. Institutional theory examines how organizations conform to norms and values in their environment through coercive, normative and mimetic pressures. The document also discusses how environmental dimensions like stability/dynamics and complexity relate to organizational dimensions like specialization, formalization, and centralization.
This document discusses several theories about how organizations structure themselves in response to their environment. It describes Lawrence and Lorsch's seminal research showing that industries with more uncertain environments developed more differentiated internal structures to address different sub-environments. Population ecology views organizations as fitting between their structural and environmental characteristics through variation, selection, and retention. Institutional theory examines how organizations conform to norms and values in their environment through coercive, normative and mimetic pressures. The document also discusses how environmental dimensions like stability/dynamics and complexity relate to organizational dimensions like specialization, formalization, and centralization.
Structure, Design and Change Prof. Shreyashi Chakraborty BM 19-21 Environment ➔ Environment ◆ Exists outside the boundary and has the potential to affect all or part of the organization ➔ General Environment ◆ Conditions that may have an impact on the organization ◆ Relevance is not overtly clear ➔ Task or Specific Environment ◆ Directly relevant to the organization in achieving its goals ◆ Depends on domain ➔ Actual or perceived environment ◆ Case of Ford and General Motors ➔ Uncertainty: do not have sufficient information about environmental factors and have difficult time predicting external changes Environmental Uncertainty Response to Uncertainty Characteristic Mechanistic Organic
Task Definition Rigid Flexible
Communication Vertical Lateral
Formalization High Low
Influence Authority Expertise
Control Centralized Diverse
What if we add another dimension? Stable Abundant
Simple Complex
Scarce
Dynamic Lawrence and Lorsch Seminal Research ➔ Industries studied ◆ Plastics (highly competitive, considerable new product and process development) ◆ Containers (no new products, certain environment) ◆ Food (midway between two) ➔ Uncertainty (external environment) measured by ◆ Rate of change over time ◆ Clarity of information management had over time ◆ Length of time to get feedback from the environment ➔ Internal environment measured by ◆ Differentiation and Integration ➔ Multiple specific environments with different degrees of uncertainty ➔ Meeting the demands of their sub-environments ➔ Solved the dilemma of ensuring differentiation and integration Population Ecology ➔ Fit between structural characteristics and environmental characteristics ➔ Assumptions ◆ Focuses on groups or populations of organizations ◆ Organizational effectiveness implies survival only ◆ Total determinism lies with the environment ◆ Carrying capacity of the environment is limited ➔ Three stage process ◆ Variation, Selection and Retention Population Ecology View ➔ Limitations ◆ What is the manager's role? ◆ Limited application to large and powerful organizations ➔ Implications ◆ Specialists and generalists ◆ More stable environment, difficult for new organizations to enter and compete ◆ Tendency of common structural characteristics Institutional Theory ➔ Congruence between organization and expectations from its environment ➔ Legitimacy ◆ Generalized perception that actions are desirable, proper within system of norms, values and beliefs ➔ Institutional Isomorphism: push for similarity ◆ Coercive pressures ◆ Normative pressures ◆ Mimetic pressures ➔ Decoupling ◆ Correct ways of organizing and behaving ◆ Technical structure vis-a-vis Institutional Structure ◆ Technology does not necessarily determine structure if size is big Environment and Structural Dimensions ➔ Environment and Specialization ◆ More instability and more dynamic environment - more specialization ➔ Environment and Formalization ◆ Stability leads to high formalization ◆ Dynamic environment - low formalization in boundary spanning activities ➔ Environment and Centralization ◆ Complexity leads to Decentralization ◆ Sudden hostility
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