Article mintzberg
Organizational Dynamics, Vol. 36, No. 4, pp. 329–344, 2007 ß 2007 Elsevier Inc. All rights reserved. www.organizational-dynamics.com ISSN 0090-2616/$ – see frontmatter doi:10.1016/j.orgdyn.2007.06.001 What is the Right
Organization Design?
N. ANAND
INTRODUCTION
A start-up company in Florida, called World
Response Group (WRG), developed an unusual woven mat for the horticulture industry that was made from all-natural fibers.
Horticulture growers in the U.S. produce hundreds of millions of potted plants each year. The product, called SmartGrow, dramatically reduced weed growth in potted plants and simultaneously provided important nutrients – all with no chemicals. SmartGrow raw materials and manufacturing expertise were available in China and India.
As the company grew, the managers and board members talked frequently about organization structure. Two schools of thought emerged. One group wanted to import raw materials into the U.S. for manufacturing by WRG and thereby have direct control over manufacturing, marketing, and sales. These functions would be departments within WRG. The second group wanted to import already manufactured and packaged products from overseas, outsource marketing to an agency, and hire a horticulture distribution company to handle sales. The second group pushed the concept that no one within the company would ever touch the product. Nor would there be functional departments for manufacturing, marketing, and sales.
That discussion of structure within WRG would not have occurred 30 years ago when
Robert Duncan published his seminal article,
‘‘What is the Right Organization Structure?’’ in Organization Dynamics in 1979. At that time, organizations were thought to be selfcontained, and structure defined the reporting relationships among internal functional
RICHARD L. DAFT
departments. Duncan’s article provided important insights about the conditions under which different internal arrangements
would
Organization Design?
N. ANAND
INTRODUCTION
A start-up company in Florida, called World
Response Group (WRG), developed an unusual woven mat for the horticulture industry that was made from all-natural fibers.
Horticulture growers in the U.S. produce hundreds of millions of potted plants each year. The product, called SmartGrow, dramatically reduced weed growth in potted plants and simultaneously provided important nutrients – all with no chemicals. SmartGrow raw materials and manufacturing expertise were available in China and India.
As the company grew, the managers and board members talked frequently about organization structure. Two schools of thought emerged. One group wanted to import raw materials into the U.S. for manufacturing by WRG and thereby have direct control over manufacturing, marketing, and sales. These functions would be departments within WRG. The second group wanted to import already manufactured and packaged products from overseas, outsource marketing to an agency, and hire a horticulture distribution company to handle sales. The second group pushed the concept that no one within the company would ever touch the product. Nor would there be functional departments for manufacturing, marketing, and sales.
That discussion of structure within WRG would not have occurred 30 years ago when
Robert Duncan published his seminal article,
‘‘What is the Right Organization Structure?’’ in Organization Dynamics in 1979. At that time, organizations were thought to be selfcontained, and structure defined the reporting relationships among internal functional
RICHARD L. DAFT
departments. Duncan’s article provided important insights about the conditions under which different internal arrangements
would
Bibliography: Tree Analysis Provides the Answer,’’ Organizational Dynamics, 1979 (winter), 59–80, provides a brief overview of functional, divisional, and matrix structures Clegg’s book Modern Organizations (Sage, 1990) traces the evolution from traditional Strategy and Structure (MIT Press, 1962) by Alfred Chandler Galbraith’s Designing Complex Organizations (Addison-Wesley, 1973) provides a brief yet In their book Reengineering the Corporation (HarperBusiness, 1993) Michael Hammer and James Champy discuss how reengineering horizontal processes can cut Cherns in ‘‘The Principles of Sociotechnical Designs,’’ Human Relations, 1976, 29, 783–792. Press, 1999) is a comprehensive exposition of that design option Mary Walton’s Car (W.W. Norton, 1999). growing trend in outsourcing. The key principles of the hollow form are summarized by Simon Domberger in The Contracting Organization (Oxford University Press, 1998) (MIT Press, 2000). Academic articles discussing the key features of the modular form include the following: Ron Sanchez and Organizational Design,’’ Strategic Management Journal, 1996, 17, 63–76; and Melissa A Use of Modular Organizational Forms: An Industry Level Analysis,’’ Academy of Management Journal, 2001, 44, 1149–1168 their book Competing on the Edge (Harvard Business School Press, 1998) (Simon & Schuster, 1998); David Nadler and Michael Tushman’s Competing by Design (Oxford, 1997); Henk Volbreda’s Building the Flexible Firm (Oxford, 1998); Jay Galbraith’s Designing Organizations (Jossey-Bass,