EXHIBIT 11.3 / Mechanistic vs. Organic Organizations: The Building Blocks of Organizational Structure
Mechanistic Organizations Organic Organizations
Specialization • High degree of specialization
• Rigid division of labor
• Employees focus on narrowly defined tasks
• Low degree of specialization
• Flexible division of labor
• Employees focus on “bigger picture”
Formalization • Intimate familiarity with rules, policies,
and processes necessary
• Deep expertise in narrowly defined domain
required
• Task-specific knowledge valued
• Clear understanding of organization’s core
competencies and strategic intent
• Domain expertise in different areas
• Generalized knowledge of how to accomplish
strategic goals valued
Centralization • Decision power centralized at top
• Vertical (top-down) communication
• Distributed decision making
• Vertical (top-down and bottom-up) as well as
horizontal communication
Hierarchy • Tall structures
• Low span of control
• Clear lines of authority
• Command and control
• Flat structures
• High span of control
• Horizontal as well as two-way vertical
communication
• Mutual adjustment
Business Strategy • Cost-leadership strategy
• Examples: McDonald’s; Walmart
• Differentiation strategy
• Examples: W. L. Gore, Zappos