Understanding Business

Organisations

Lecture 3:
Mechanistic and Organic Forms of
Organisational Structure

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.2

Scope and Coverage

This topic will cover:
• The main characteristics of mechanistic and
organic forms of organisation structure
• The role of contingencies in choosing the most
appropriate form of structure
• The main types of contingent factors shaping
organisation structures
• The opportunities for management to select the
most appropriate structure

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.3

Learning Outcomes
By the end of this topic, students will be able to:
• Compare and contrast the mechanistic and organic
forms of organisation structure
• Describe how contingencies play a role in selecting
the most appropriate form of structure
• Understand the influence of the various contingent
factors on organisation structure
• Explain why management choice is also a factor in
deciding upon an organisation structure

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.4

Importance of Organisational
Structure
• An organisation’s strategy is
more likely to succeed if it
has an appropriate structure
• Encourages people to act in
ways that support the
strategy
• Supports organisational
goals

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.5

Mechanistic Structure
• Emphasises the vertical hierarchy to achieve co-
ordination
• Responsibilities are clearly defined
• Rigorous reporting requirements
• Policies are applied consistently
• Communications are mainly vertical
• Vertical aspects of the structure dominate and
control the organisation

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.6

Organic Structure
• Horizontal aspect of the structure is more influential
• Tasks are broadly defined and flexible
• Cross functional teams set up to work on problems
• Authority based more on expertise than position in
hierarchy
• Communication is horizontal among those familiar
with the task

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.7

Mechanistic or Organic?

• Managers need to decide which approach is

appropriate

• Take account of theories that have been developed

• Decision may depend upon ‘contingencies’

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Comparison of Mechanistic and
Organic Organisations
Mechanistic
Specialised tasks
Hierarchical structure of control
Knowledge located at top of
hierarchy
Vertical communication
Loyalty and obedience stressed
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Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.8
Organic
Contribute experience to common
tasks
Network structure of contacts
Knowledge widely spread
Horizontal communication
Commitment to goals more
important
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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.9

The Influence of Contingencies

• Contingencies are factors that encourage
managers to favour one approach rather than
another
• They seek to create a structure that is consistent
with these contingencies
• Successful organisations typically have a good fit
between contingency factors and structure

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.10

Contingency Factors Shaping

Organisation Structures
Contingency factors Organisation structure

Strategy Mechanistic
Environment
Size/Age Performance
Technology
Interdependence
Political contingencies Organic

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.11

Strategy as a Contingency
Strategy adopted Appropriate organisation structure

Cost leadership strategy – focus is on Clear functional structure – task

increasing efficiency to bring costs down specialisation and strict chain of
below those of competing firms command ensure that work is done as
efficiently as possible

Differentiation strategy – focus is on Matrix or team-based structure –

innovation and developing new products encourages innovation and flexibility by
or services more rapidly than competing having staff working together from across
firms functional boundaries

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.12

Environment as a Contingency
Structure
Mechanistic Organic

Incorrect fit: Correct fit:

Mechanistic structure Organic structure in
Uncertain in uncertain uncertain environment
(unstable) environment
Structure too tight
Environment
Correct fit: Incorrect fit:
Mechanistic structure Organic structure in
Certain in certain environment certain environment
(stable) Structure too loose

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.13

Size/Age as a Contingency
• Organisations go through four distinct stages in
their life, each with an appropriate structure:
– Birth stage – few partners or employees, little division of
labour – centralised structure
– Youth stage – starts to grow, departments created –
controls become more formal
– Mid-life stage – continues to grow with extensive
division of responsibility – growth of functional
departments
– Maturity – large and mechanistic, strong vertical system
and lots of rules – creation of separate divisions

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.14

Technology as a Contingency
• Organisational structure needs to reflect
technology used
• IT can be used to rationalise processes and cut
costs
• Also used to support a more decentralised organic
structure

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.15

Woodward’s Manufacturing
Technology Study
• Joan Woodward’s study in 1965 identified three
broad types of manufacturing processes:
– Unit and small batch production
– Large batch and mass production
– Continuous process
• Concluded there was a relationship between the
degree of technical complexity and the structure of
the organisation
• Different manufacturing technologies impose
different demands on people and organisations

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.16

Departmental Interdependence
as a Contingency
• Refers to the extent to which departments rely on
each other
• Low level means they can work independently
• High level means constant exchanges
• These require different structural forms:
– Pooled interdependence
– Sequential interdependence
– Reciprocal interdependence

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.17

Example of Pooled
Interdependence (a Bank)
Form of interdependence Type of co-ordination required

• Chain of command
• Standardise procedures
• Rules and regulations

Clients

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.18

Example of Sequential
Interdependence (Assembly Line)
Form of interdependence Type of co-ordination required

• Plans and
schedules
• Scheduled
meetings
• Liaison roles
Client

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.19

Example of Reciprocal
Interdependence (Hospital)
Form of interdependence Type of co-ordination required

• Unscheduled meetings
• Teams
• Task forces
• Project manager

Client

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.20

The Contingency Approach

• Previous points discussed are collectively known
as the contingency approach to organisation
structure
• The most effective structure will depend upon the
situation in which the organisation is operating
• Successful organisations adopt a structure that is
right for their strategy and environment

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.21

Management Choice
• Counterbalance to the contingency approach
• States that management has a choice over the
structural form
• Process of organisational choice and design is
shaped by political processes
• Structures will reflect the interests of politically
powerful groups in an organisation
• Managers can make a choice based on their own
preferences

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.22

Summary
• An organisation’s strategy is more likely to succeed if
it has an appropriate structure
• Choice is between mechanistic or organic
• Contingencies encourage managers to favour one
approach rather than another
• Common contingencies include strategy, environment,
technology and interdependencies
• Successful organisations adopt a structure that is right
for their strategy and environment
• Managers often have a choice over the structural form

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.23

References
• Boddy, D. (2005), Management: An Introduction,
3rd edition, Prentice Hall, Chapter 12

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 Mechanistic and Organic Forms of Organisational Structure Lecture 3 - 3.24

Lecture 3 – Mechanistic and Organic Forms

of Organisational Structure

Any Questions?

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