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Element  3 of the Drivers of Change model:  Organizational Structures


By Craig A. Stevens and his students


The organizations structure is the way the company is organized to perform work. Symbolically in the Westbrook Stevens Drivers of Change Model the organization is the house-like structure and segregates the internal environment from the external environment. Implementing the structure can take many shapes.


Structural Design

There is no "one" right organizational structure! 


"There may not even be one right organizational structure in any one company. Chances are, if all your divisions look the same on the organizational chart you have a problem." (Craig A. Stevens, 1995) As a trend, we can see businesses changing, as Peter Drucker says, “from one best organization to multiple organization structures to accommodate the business environment.” 

Manager/Leaders/Executives should design and set organizations up to make things happen…the good things not the bad things. However, sometimes organizations are set up to achieve the opposite results.


Functional Organizations are great for mechanistic, repetitive work.  Some people want boundaries and at the end of the day work is over.  Divisional organizations structures are often better if the divisions are small.  However when divisions grow many times they become more functional and mechanistic.  The smaller more organic divisions often create work that is more enjoyable and meaningful.  This is important as one’s skill and competencies grow.  Often with knowledge workers, the work is never over and one can work extremely hard or do nothing and the leaders will not be able to tell the difference.  Therefore, more organic cultures and structures are a necessity for an enjoyable work environment and to retain highly skilled and/or professionals. 


Links to...


Organic vs Mechanistic

Structural Dilemmas 

Mintzberg's Structural Configurations


  • Division serves as base for  technological continuity

  • Disadvantages Functional Organization 


    • The client is not the focus of activity and concern

    • Advantages of a Pure Projectized Organizations




      YouTube Video OS1 -



      Figure OS7 Projectized Organizational Structure

      Figure OS8 Projectized Organizational Structure


      Figure OM2




      YouTube Video OS3 - Craig A. Stevens - POD 2 Cast on Organic Vs. Mechanistic Organizations






      Figure OM3



      Structural Dilemmas



      YouTube Video OS4 - Craig A. Stevens

      POD cast on Structural Dilemmas in Designing Organizations




      Bolman, Lee G. and Terrence E Deal, Reframing Organizations, Artistry, Choice and Leadership, 3rd Edition, Jossey-Bass, John Wiley & Sons, Inc. 2003

      Figure  SD1

      Figure  SD2


      Figure  SD3


      Higher degrees of differentiation is often found in more high-tech organizations.  Look at the levels of management, if the ranks are filled by people with different backgrounds, experiences, and years of experiences, then you have a high level of differentiation.  As a norm, products and services are becoming more complex.  As an example of product complexity, today we do not have as many pure mechanical or electrical products.  Things are becoming more Electro-Mechanical. Therefore not only is more differentiation required in the marketing and on a competitive or strategic level, but this also leads to more differentiation in the organizational design.



      YouTube Video OS5 - Craig A. Stevens - POD cast 2 on Structural Dilemmas in Designing Organizations





      Figure  SD4

      Figure  SD5


      YouTube Video OS6 -

      Craig A. Stevens - POD cast 3 on Structural Dilemmas in Designing Organizations





      Figure  SD6

      Figure  SD7


      The quality of the state of collaboration is very important.  How hard it is to work together is a complicated subject.  As it relates to organizational structural issues, if Differentiation is high, then Integration needs to also be high.  We will need more of a multidiscipline team.  This is a very dangerous thing for managers.  Because only the team knows if the formula we use is right and only after they have experienced the effects.  The leaders/managers must become more like referees or facilitators.  Managers have to respect the team and fairly call it as they see it.  However in low tech organizations, “chain of command” becomes more acceptable and logical.   


      Figure  SD8


      YouTube Video OS7 - Craig A. Stevens - POD cast 4 on Structural Dilemmas in Designing Organizations





      Figure  SD9

      Figure  SD10


      Figure SD11

      Figure SD12


      Mintzberg's Structural Configurations



      YouTube Video OS8 - Craig A. Stevens  - POD cast on Mintzberg's Organizational Configurations




      Mintzberg’s (1979),Prentice Hall, Upper Saddle River, N.J. as reported by Bolman, Lee G. and Terrence E Deal, Reframing Organizations, Artistry, Choice and Leadership, 3rd Edition, Jossey-Bass, John Wiley & Sons, Inc. 2003

      Figure M1


      Figure M2


      YouTube Video OS9 -

      Mintzberg On Operations as a part of Strategy






      Figure M3


      Figure M4


      Figure M5




      Figure M6


      Figure M7


      Often what happens when a division loses market share and starts to shrinks… management will move it back to a larger organizational unit.  This creates more problems and often creates more mechanistic controls which in turn may lower the probability of success.


      Figure M8


      Figure M9


      YouTube Video OS11 - Craig A. Stevens Intro on Organizational Structures




      Traditional Organizational Structures


      According to the AMA (1998) - 90% of Traditional Organizations Fall Into three types or a mixture of these three types.

      • Hierarchical/Functional

      • Matrix

      • Task Force

      Gary Dessler, in his book Organization Theory Integrating Structure and Behavior, defined three basic structures: 

      1. A "Functional Structure" which may be process oriented and more mechanistic. In a functional organization, revenue derives from operations [not projects].  Staff is grouped by specialty, which gives the employees one clear superior.  However they may still perform projects.  The Project Manager (PM) has little to no authority.  Therefore it is likely the PM is actually a more of a Project Coordinator.

      1.  A "Divisional Structure" which could be divided by products, geographical locations, or industry. A large division could look like a functional structure where a smaller division could be altogether different, being more organic in nature. 

      1. A "Matrix Structure" which is designed around projects. Each of these structures has significance in differing environments. Other writers also have described other organizational structures. 

      Dessler, Gary. Organization Theory Integrating Structure And Behavior." Prentice-Hall, Inc., 1995, p. 124.

      Functional Organizational Structures


      Figure OS1, Functional Organizations with a PM at staff level.


      Figure OS2, Functional Organizations with a PM under a a divisional manager and Team Matrixed (But Not. in a Matrix Organizations)


      Figure OS3, Functional Organizations with a PM under a a divisional manager.


      Advantages of Functional Organization


      • Maximum flexibility in the use of staff

      • Individual experts used by different projects

      • Specialists grouped to share knowledge and experience

      • Division serves as base for  technological continuity

      • Division is the normal path of advancement for individuals

      Meredith, J. R., & Mantel, S. J., Jr. (2000). Project management: A managerial approach (4th ed.) [UOP Special Edition Series]. New York: Wiley.

      Figure OS4 Dessler on Use of Functional Organization




      Gary Dessler, Organization Theory Integrating Structure and Behavior, Pg. 124, Prentice-Hall, Inc. New Jersey, 1995



      Disadvantages Functional Organization 


      • The client is not the focus of activity and concern

      • Division tends to be oriented toward the activities particular to its function

      • Occasionally, no individual is given full responsibility for the project

      • There are often several layers of management between the project and the client

      • There is a tendency to suboptimize the project


      Figure OS5 Dessler on Functional Organization


      Projectized Organization


      Figure OS6 Projectized Organizational Structure


      Advantages of a Pure Projectized Organizations


      Figure OS7 Projectized Organizational Structure

      Figure OS8 Projectized Organizational Structure


      Disadvantages of a Pure Projectized Organizations


      Figure OS9 Projectized Organizational Structure


      Matrix Organizational Structures


      Figure OS10 Matrix Organization 



      Advantages of Matrix Organizations

      Figure OS11 Matrix Organization 


      Figure OS12 Matrix Organization 



      Disadvantages of Matrix Organizations


      Figure OS13 Matrix Organization 


      Figure OS14 Matrix Organization 






      What About the Organizational Driven

       Culture Issues?


      Any structure involving knowledge workers and/or high technology must be organic and not mechanistic.









      What Organization Fits What Environment?




      What do I think will Change?????




      Craig's Virtual, Extreme, Organic Organizational 

      Structure of the 21 Century....and to Infinity and Beyond. 



      So, I got a little carried away. Click on the slide below to see it explained.

      Link to The Organizational Structure of the 21st Century



      Looks funny...but is very similar to SAIC's (a 50,000 person employee owned company) vision.



      Organizational Structures Links:

      (found by Josiah Wedgewood, UoP 2005) (found by Josiah Wedgewood, UoP 2005)

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