The machine organization is defined by its standardization. Work is very formalized, there are many routines and procedures, decision-making is centralized, and tasks are grouped by functional departments. Jobs will be clearly defined; there will be a formal planning process with budgets and audits; and procedures will regularly be analyzed for efficiency.
The machine organization has a tight vertical structure. Functional lines go all the way to the top, allowing top managers to maintain centralized control. These organizations can be very efficient, and they rely heavily on economies of scale for their success. However, the formalization leads to specialization and, pretty soon, functional units can have conflicting goals that can be inconsistent with overall corporate objectives.
Large manufacturers are often machine organizations, as are government agencies and service firms that perform routine tasks. If following procedures and meeting precise specifications are important, then the machine structure works well.