Organizational Forms: Context Matters

A distinction that explains variations in managerial prescriptions is that between mechanistic and organic forms of organization, often influenced by the sector a particular firm is in. The former tends to be hierarchical and bureaucratic (with standardized control systems) while the latter tends to be flatter and typically provide more autonomy and power to their rank and file. Government organizations, banks, call centers, manufacturing operations tend to fall in the first category, while consulting firms and largely knowledge-based firms tend to fall in the latter.

Organic structures are characterized by a low degree of formality, specialization and automation/standardization. Boundaries are not rigid and so is the decision-making process. Consulting firms require nimbleness and flexibility in the way they handle issues, especially when those concern customers.

The lines of demarcation are often not very strict which is why some theorists view this dichotomy as more of a continuum: from simpler and more stable environments to more complex, fluid, flexible ones. The organic structure model is actually gaining ground in most western economies on account of the fact that work in general is moving in the direction of fluid yet flexible forms.

In the knowledge economy, the preponderance of organic forms is a natural consequence of a trend that is not likely to abate. If anything, with higher automation and robotics it is likely to be accentuated.