Mechanistic &

Organic Structure

Gargi | Gowri | Gowtham | Gowthaman | Harish Guptha | Harish Kumar | Ranganath

1 Organizational Structure OVERVIEW
2 Structure Types

3 Hybrid Structure

4 Impact of Non-Structural Factors

5 Implications
 Organizational Structure?
 Outlines how activities are directed to achieve
the goals
 Explains flow of Information between levels
 Gives definition for Employee’s job

Components

Complexit Centralization
Formalization
y

Need for it?

 Attract and retain Employees  Better decision making among managers

 Avoid confusion among employees  Provide ideal results for a business

 Organic
Structure Types Mechanistic
Structure Structure
Tom Burns and G M Stalker
- Study on 20 Industrial firms
- Nature of Organization’s Environment
- Labeled Two Structures

Key Findings
Effective structure - adjust to the environment’s requirements
- Mechanistic Structure - Stable and Certain Environment
- Organic Structure - Dynamic and uncertain Environment
These 2 structures form two extreme ends
- Purely mechanic or purely organic is not possible
- Either tend toward mechanistic or organic
 Sneak Peek into the Key Differences

Pyramid Shaped Flat/Fluid

Rigid Departmentalization Cross-functional Teams

Centralization MECHANISTI ORGANIC Decentralization

C

Narrow Span of Control Wide Span of Control

Stable
Innovative
 Can Organic and mechanistic
organizations coexist?

Simply changing structures back and forth (organic to

mechanistic or vice versa) would be adequate for meeting
changing environmental demands!

Initial Stage

Mechanistic

Smooth transition to an organic structure when environmental turbulence occurs

Initial performance not Good

Organic

High performance in unpredictable environments

Transition is not very well if their external environment

stabilizes

Hybrid Structure
How then, can one  Combination of non-redundant elements of both
resolve this paradox? departmentation and centralization
 Perform well in most environments
 Successfully adapt when they are required to switch on
both elements of structure
 Post-
it

Scot
ch
tape Sandpape
WHAT
r,
Industrial
Tools It Does

An organisation known for innovation

A Large organisation with a few routine The Result? - It’s a hybrid, a mix of both.
manufacturing technologies

- Size of 91000+ employees force it to become more

Multiple departments such as health, office
products and construction mechanistic, with complex hierarchical structure.
- However, department of innovation enjoys a
The need for innovation suggest an organic slightly flat structure, with horizontal communication
structure whereas the big size suggests a more
mechanistic one
 Impact of Non-Structural Factors

Bigger – Mechanistic Routine – Mechanistic

Smaller - Organic Non-routine - Organic
Size Technology

01 02 03 04 05
Strategy
Environment Life Cycle
Strategy influences
Stable - mechanistic Birth/Young – Organic
structure and vice-versa.
Dynamic – organic Maturity - Mechanistic
 STRATEGY
 The organizational structure must accommodate
its strategy to reach the set objectives.
 When strategy changes, structures must change.
 Ex – International expansion needs geographical
divisions.
 Three types of strategy:
 Companies seeking to be first at introducing
latest products – Organic (Apple)
 companies seeking to make an existing product
more cost effective – Mechanistic (Walmart)
 Companies with the mix of both that imitates an
idea and profit from the success of the product.
Tight control for current business and looser
structures for new pursuits. (IBM)
SIZE
 Small organisations have little to no structure,
tasks performed are based on likes, dislikes,
ability and/or need. Ex. Restaurant, single
retail store. – Organic
 As growth happens, delegation of authority and
well-defined roles become a necessity. Hence,
formal structure is required.
 Large organisations have more specialization,
more vertical hierarchies, rules and regulations
– Mechanistic .
TECHNOLOGY
 Technology affects organizational
structure and productivity by improving the
efficiency of communication and resource
flow.
 Businesses that renders uniform
products/services tends to be more
standardized. They have rigid and more
defined methodologies for each task hence
turns Mechanistic(Ford)
 Whereas businesses intended in delivering
more customized products or services and
those relaying on advanced technology have a
dynamic requirement. Hence tend to be more
flexible and Organic(Google)

ENVIRONMENT
 The utility of the notions of “mechanistic” and “organic”
management systems resides largely in their being related as
dependent variables to the rate of “ ENVIRONMENTAL”
change - Burns and stalker
 The environment is the world in which the organization
operates. It includes economic, socio-cultural, legal-political,
technological and natural aspects.
 STABLE - Customers desires are well understood and remain
constant for a long time. Organisation find mechanistic
structure to be advantageous. Ex. Big Basket
 DYNAMIC  - Customers desires are continuously changing.  itself in a stable, secure environment
Ex. Electronics. Organization find organic structure
beneficial.
 Creation Phase:
- does not yet have a formal structure.
- There is not much delegation of authority
- Organization becomes more organic in LIFE-CYCLE
structure during this phase.
 Developed Phase:
- Organization with a more complex and I
increasingly formal structure
- More levels appear in the chain of command
and the founder may have difficulty
remaining in control.
- Organization becomes older, it may also
become more mechanistic in structure.
 Maturity Phase:
- Organisation more interested in maintaining
- Attempt to improve efficiency and
profitability, the firm often tends to become
less innovative. Ex. New Coca Cola - decline
in sales
IMPLICATION
S

Industry Organizational Managerial Employee

- Efficient technological - Increases

- Led to obtain high accountability; helps - Allows to perfect their
transfer & co-operative
performance levels identifying easy functional skills
research relationships
- Departmentalization resolution to defects - Enables direct
- Augmentation in the
brings about high skilled - Explores the range of communication channels;
competitiveness
workers; increasing possible future trends facilitating guidance &
productivity expertise they need
readily available
Thank you