Reading Your Own Structure

Organization & StructureEssay12 min read

Some organizations come close to one of the explorer's forms and others mix several; the explorer is built for both.

Why so many organizations are hybrids

Here a hybrid is any organization that mixes forms; the explorer's hybrid structure is one such mix, units on different bases side by side, each under a single boss. Mintzberg (1980), a synthesis of earlier research offering propositions without a new test, set out five configurations, each resting on one prime coordinating mechanism. He claimed that effective organizations favor a logically consistent configuration, while contradictory pressures or transitions drive some to hybrids. He later qualified the pure types: some forms, he expects (Mintzberg 1991, a practitioner article), are most common in hybrids, and a 1992 book version of a similar text (Mintzberg 1992) finds no truly effective organization in pure form. Most recently he wrote that many organizations come close to one of four forms, while others are hybrids of them or in transition among them (Mintzberg 2024, a conceptual article).

The measurement tradition reached a similar place: the Aston group, in a multi-organization comparative survey of 52 work organizations in England, built scales for five dimensions of structure and found that they resolved into four underlying factors, not one; the authors concluded that the idea of a single bureaucratic type was no longer useful (Pugh and others 1968). Hinings and Lee (1971), a small multi-firm replication in nine manufacturing organizations, found the same groupings: specialization, formalization, and standardization went together and with size, while centralization went with dependence on other organizations. Wagner (2021), a meta-analysis of 346 correlations from 155 published articles, found that many links among these dimensions have weakened since an earlier meta-analysis found them significantly intercorrelated, which he reads as failing to give consistent support to the bureaucratic tenet that they go together. How structuring relates to centralization is disputed: Donaldson, Child, and Aldrich (1975), a discussion ungraded here, report moderately high negative correlations between the two in Child's national study of 82 organizations, lower ones at Aston, and on that relation call the Aston results somewhat discrepant with both that study and Hinings and Lee's. The machine bureaucracy's profile is contested on that point.

How the Aston group took the bureaucratic type apart into four dimensions

Select a box to read what the records say of it, or the link under the drawing for the one disputed relation. The 1968 and 1969 Aston studies are cross-sectional, the 1969 one of 46 organizations in one region of England, and every study here was read in its abstract.

Links between branches:

Select a box to read what the records say of it.Structure as Aston measured it. The Aston group built scales for five primary dimensions of structure (specialization, standardization, formalization, centralization, and configuration) from 64 component variables in 52 work organizations in England, and four underlying dimensions emerged. The authors concluded that the concept of the bureaucratic type is no longer useful (Pugh and colleagues 1968). Configuration is not hung below, since the records read do not say where it loaded. Hinings and Lee (1971) judged that their replication's findings "closely parallel those of Pugh et al."Structuring of activities. Predicted from size and technology, with a multiple correlation of 0.75, in 46 organizations in the English Midlands (Pugh and colleagues 1969). Hinings and Lee (1971) found its three measures related to size in nine manufacturing organizations.Specialization. Aston scored functional specialization by how many specialist functions were held by full-time specialists, and this series' dimension note records it loading with standardization and formalization on structuring of activities. Hinings and Lee (1971) found the three in one group. Hanging it here is this series' reading, since the 1968 paper was read only in its abstract.Standardization. Aston's dimension for procedures. This series' note on standardization and formalization records the two loading together with specialization on structuring of activities, and Hinings and Lee (1971) found the three in one group. The 1968 paper was read only in its abstract, so placing it here is this series' reading.Formalization. Aston's dimension for written documents, which this series' note on standardization and formalization records loading with standardization and specialization on structuring of activities. Hinings and Lee (1971) found the same three in one group. Hanging it here is this series' reading, since the 1968 paper was read only in its abstract.Concentration of authority. Predicted from dependence on other organizations and location, with a multiple correlation of 0.75 (Pugh and colleagues 1969). Hinings and Lee (1971) found centralization and lack of autonomy related to dependence on other organizations.Centralization. Aston measured centralization by the level in the hierarchy with authority to take each of a list of decisions, and this series' centralization note records it loading with lack of autonomy on concentration of authority. Hinings and Lee (1971) found the two in one group. Hanging it here is this series' reading, since the 1968 paper was read only in its abstract.Lack of autonomy. This series' centralization note records it loading with centralization on concentration of authority, and Hinings and Lee (1971) found the two in one group. With the 1968 paper read only in its abstract, its place here is this series' reading.Line control of workflow. Predicted from the operating variability scale of charter, with a multiple correlation of 0.57 (Pugh and colleagues 1969).Size of supportive component. The fourth underlying dimension in Pugh and colleagues (1968). The records read give it no context predictor: the 1969 context study predicts only the other three.A disputed relation. Donaldson, Child, and Aldrich (1975) report moderately high negative correlations between structuring of activities and centralization in Child's national study of 82 organizations, and lower ones at Aston. It is one of the grounds on which this series contests the machine bureaucracy's centralization cell.

What had been treated as one bureaucratic type came apart into four underlying dimensions, three of them predicted by different parts of context. Wagner (2021) found that many of the links among formalization, standardization, specialization, vertical differentiation, and decentralization have weakened since an earlier meta-analysis found them significantly intercorrelated.

Source: Pugh and colleagues 1968, a multi-organization comparative survey; Pugh and colleagues 1969a, a multi-organization comparative survey of 46 organizations; Hinings and Lee 1971, a small multi-firm replication; Wagner 2021, a meta-analysis of 346 correlations from 155 published articles; Donaldson and colleagues 1975, a discussion.

Whether a hybrid is a lapse or a choice is unsettled. Doty, Glick, and Huber (1993), a quantitative test across a sample of organizations, found, against their own expectations, that organizations resembling Mintzberg's ideal types were not more effective, while fit to Miles and Snow's types predicted 24 percent of the variance in effectiveness. Ketchen and colleagues (1997), a meta-analysis of 40 tests, found that configuration does partly explain performance, though it pooled many strategy types with structures, and tests of pure structural types stay mixed. Krabberød (2015), reviewing the 218 articles that cited the Doty test, argues that the test has not been shown to be exhaustive. Gresov and Drazin (1997) make theoretical room for a mixed answer: different designs can be functionally equivalent, so more than one can fit.

Against mixing, Williamson (1975) doubted that a mixed enterprise, with divisions run variously as a holding company, as an M-form, and under close supervision, could reliably be expected to last, though he called the judgment that it lacks rationality properties probably too strong. Only our reading ties two other works to mixing. Dessein, Garicano, and Gertner (2010), a formal model with no new data, take business units paired with company-wide functions as given and show the pairing builds in a conflict: functional managers want too much standardization, unit managers too much local adaptation. Whittington and colleagues (1999), a panel survey of European firms, found that piecemeal changes in structure, processes, and boundaries, information technology excepted, delivered little performance benefit, while the few firms that made the full set enjoyed high-performance premia; it tested sets of changes, not mixed forms.

Setting the profile

Every form is profiled on eleven dimensions, each built on a named source; where the source gives no bands, the bands are this site's reading. Set your organization on the same scales:

The eleven dimensions and their levels

Select a dimension to read what each of its levels means.

Select a dimension to read what each of its levels means.Basis of grouping. Function or process: Units are formed around the work done or the skill held, such as engineering, manufacturing, and sales. This is Gulick's grouping by major process and Mintzberg's grouping by means (skill, knowledge, work process, and business function). Product or purpose: Units are formed around an output or a purpose, and each unit holds most of the functions that output needs. This is Gulick's grouping by major purpose and Mintzberg's grouping by output, one of his market bases. Client or market segment: Units are formed around the people or things the organization deals with, such as a customer segment or an industry served. This is Gulick's grouping by persons or things dealt with and Mintzberg's grouping by client. Place: Units are formed around a territory, such as a country or a sales region. Gulick and Mintzberg both name place as a basis. Two or more at once: Two bases are held at the same level, as in the matrix, where a position belongs to a function and to a product, client, or place unit at the same time. Mintzberg reports grouping on a concurrent functional and market basis in the professional bureaucracy.Specialization. Low: Few specialist roles. Most people do a broad range of tasks, and specialist work is done by generalists or bought from outside. Medium: The main functions have their own specialists, but many roles stay broad. High: Many functions are held by full-time specialists, and individual roles are narrow.Standardization and formalization. Low: Few written procedures or job descriptions. Work is governed by judgment, direct instruction, or shared norms. Medium: Core routines are written down and followed, while much of the work is left to discretion. High: Procedures, job descriptions, and records cover most work, and rule observance is checked.Centralization. Centralized: Most decisions, including many operating ones, are taken at or near the top. Mixed: Strategic and financial decisions are taken at the top, and operating decisions are delegated. Decentralized: Most decisions are taken low in the hierarchy or by people who take part in deciding, with the top setting direction.Layers and span of control. Flat: Few layers between the top and the front line, with wide spans of control. Moderate: A middle line of managers between the top and the front line, with spans neither very wide nor very narrow. Tall: Many layers, with narrow spans of control at most levels.Decision rights and the locus of authority. Vertical and horizontal centralization: Formal and informal power stays mostly at the strategic apex (Mintzberg's Type A, typical of the simple structure). Limited horizontal decentralization: Formal power stays at the apex, and informal power flows to the analysts who standardize everyone else's work (Type B, the machine bureaucracy). Limited vertical decentralization: Much formal power is delegated, in parallel, to the managers of market-based units, usually called divisions (Type C, the divisionalized form). Selective vertical and horizontal decentralization: Decision power is spread widely, to work constellations at various levels made up of line managers, staff, and operating specialists, with different decisions going to different places (Type D, the adhocracy). Vertical and horizontal decentralization: Power flows, largely in parallel, down the line and out to the operators of the operating core (Type E, the professional bureaucracy).Prime coordinating mechanism. Mutual adjustment: People coordinate their own work by informal communication with each other. Direct supervision: One person takes responsibility for the work of others, giving instructions and monitoring their actions. Standardization of work processes: The content of the work is specified or programmed in advance, usually by analysts. Standardization of outputs: The results of the work are specified, such as targets or product dimensions, and the method is left to the unit. Standardization of skills: The training a worker needs is specified, usually by bodies outside the organization, so trained workers coordinate by knowing what to expect of each other. Standardization of norms: Shared beliefs and values, usually across the whole organization, guide the work.Lateral mechanisms. Hierarchy, rules, and goals only: Coordination runs through rules and programs, referral up the hierarchy, and goal setting, with no designed lateral links. Direct contact and liaison roles: Managers who share a problem settle it between themselves, and where contact between two departments is heavy a liaison role is set up to handle it. The designed levers that foster such voluntary contact belong here too (interdepartmental rotation and events, co-location, mirror-image departments, consistent rewards and measures, and communities of practice), and so does electronic coordination through intranets, enterprise social software, and cross-functional information systems, which Galbraith (2002) places after voluntary processes and before formal groups and Daft places as the lightest horizontal linkage, below liaison roles. Task forces and teams: Temporary groups of representatives from several departments solve shared problems, and recurring ones become permanent teams. Integrating roles and managerial linking roles: A product, program, or project manager integrates across departments, first with expert power only and then with formal power over budgets. Matrix: Two lines of authority are held at once, so some positions report both to a function and to a product or project.Differentiation against integration. Low differentiation, light integration: Units resemble each other in goals, time horizons, interpersonal style, and formality, and the hierarchy and its procedures integrate them. Moderate differentiation, some integrating roles: Units differ in some orientations, and individual integrators or committees join them alongside the hierarchy. High differentiation, heavy integration: Units differ sharply, and an integrating department, cross-unit teams, and open confrontation of conflict are needed to hold them together.Mode of exchange and control. Market: Exchanges are mediated by markets, which measure and reward individual contributions precisely; efficient when performance ambiguity is low, even when goal incongruence is high. Bureaucracy: Exchanges are mediated by bureaucracy, which combines close evaluation with a socialized acceptance of common objectives; efficient when goal incongruence and performance ambiguity are both moderately high. Clan: Exchanges are mediated by clans, which rely on a socialization that eliminates goal incongruence; efficient when performance ambiguity is high and goal incongruence low.Boundary permeability. Closed: Clear vertical, horizontal, external, and geographic boundaries: work, information, and people move across them only through formal channels. Selective: Some boundaries are opened by design, such as cross-functional teams or close supplier partnerships, while others stay firm. Permeable: Most boundaries are crossed routinely: layers, functions, the firm's edge with partners and customers, and borders between countries.

Three dimensions are nominal (basis of grouping, coordinating mechanism, and mode of exchange), so their levels are kinds, not amounts. The other eight run from one end of a scale to the other.

Source: Gulick 1937; Pugh and colleagues 1968, a multi-organization comparative survey; Graicunas 1933, a conceptual argument with no test; Mintzberg 1980, a synthesis of earlier research, offering propositions without a new test; Mintzberg 1979; Galbraith 1974; Lawrence and Lorsch 1967a, a multi-firm comparative field study; Ouchi 1980, a conceptual article; Ashkenas and colleagues 1995.

  • Basis of grouping. What are the units just below the top formed around: a function or process, a product or purpose, a client or market segment, a place (Gulick 1937; Mintzberg 1979), or two or more at once, as in the combined forms Galbraith (1971) describes? Thompson's rule, as Van de Ven, Ganco, and Hinings (2013) cite it, is to group the most interdependent positions together first.
  • Specialization. How many functions are held by full-time specialists: low, medium, or high (our bands on the scale of Pugh and others 1968)?
  • Standardization and formalization. How much of the work is covered by written procedures, job descriptions, and checked rules: low, medium, or high (Pugh and others 1968; Hage and Aiken 1967; our bands)?
  • Layers and span of control. Flat, moderate, or tall: our bands, drawn on Graicunas's count of a superior's relationships (1933) and Jaques's strata of time span (1990).
  • Decision rights. Where formal and informal power sits: at the apex; at the apex, with informal power flowing to the analysts who write the standards; delegated to the heads of market-based units; spread selectively to groups at many levels; or spread down the line and out to the operators (Mintzberg 1980).
  • Prime coordinating mechanism. Mutual adjustment, direct supervision, or standardization of work processes, outputs, skills, or norms: the one the organization leans on most (Mintzberg 1979, 1989).
  • Lateral mechanisms. The highest rung of Galbraith's ladder in regular use: hierarchy, rules, and goals only; direct contact and liaison roles; task forces and teams; integrating and managerial linking roles, the latter with budget power; or a matrix (Galbraith 1973, 1974; the first level is his base, and pairing his seven lateral processes into the other four is ours).
  • Differentiation against integration. How sharply units differ in goals, time horizons, interpersonal style, and formality, and what holds them together (Lawrence and Lorsch 1967).
  • Mode of exchange. Market, bureaucracy, or clan (Ouchi 1980, a conceptual article).
  • Boundary permeability. How freely work, information, and people cross the vertical, horizontal, external, and geographic boundaries (Ashkenas, Ulrich, Jick, and Kerr 1995): closed, selective, or permeable, in our bands.
  • Centralization. Most decisions at the top, mixed, or low, in our bands on the Aston scale. It is profiled but not counted, since decision rights carry the vertical aspect.

How span of control sets the layers of a hierarchy

Move the sliders to see how many layers of managers a front line needs at a given span, how many relationships a manager with that span must keep in mind, and the stratum that the role's longest task puts it in. The span starts at two, because with a span of one no number of layers reaches a second person. Where the front line is not an exact power of the span, rounding up to a whole layer is the calculator's rounding, not Williamson's.

1,000
5
12
  • Layers of managers above the front line5One person needs no layer above them.L=⌈logsN⌉, the smallest whole number L with sL≥N, counted by whole-number multiplication. Williamson 1967, a theoretical model.
  • Relationships for a manager with this span100s(2s−1+s−1), every direct single, direct group, and cross relationship counted. Graicunas 1933, a conceptual argument with no test.
  • The role's stratumStratum IIILongest task under three months.Longest task three months to under one year.Longest task one year to under two years.Longest task two years to under five years.Longest task five years to under ten years.Longest task ten years to under twenty years.Longest task twenty years or more.Boundaries at three months and one, two, five, ten, and twenty years; a task exactly at a boundary falls in the stratum that begins there. Jaques 1990.

Layers of managers above the front line
Span10 people100 people1,000 people10,000 people
2471014
33579
42457
52356
62346
72345
82345
92345
101234

L=⌈logsN⌉, the smallest whole number L with sL≥N, counted by whole-number multiplication. Williamson 1967, a theoretical model.

Relationships for a manager with this span
SpanRelationships
11
26
318
444
5100
6222
7490
81,080
92,376
105,210
1111,374
1224,708

s(2s−1+s−1), every direct single, direct group, and cross relationship counted. Graicunas 1933, a conceptual argument with no test.

Jaques's strata
StratumLongest task in the role
IUnder three months
IIThree months to under one year
IIIOne year to under two years
IVTwo years to under five years
VFive years to under ten years
VITen years to under twenty years
VIITwenty years or more

Boundaries at three months and one, two, five, ten, and twenty years; a task exactly at a boundary falls in the stratum that begins there. Jaques 1990.

Layers grow only with the logarithm of the front line, so a wider span flattens a hierarchy fast. Relationships grow far faster than the span: going from four subordinates to five raises them from 44 to 100. Jaques set the layers by the time span of the work instead of by headcount.

Source: Williamson 1967, a theoretical model; Graicunas 1933, a conceptual argument with no test; Jaques 1990.

Galbraith's lateral processes, added one at a time

Start from rules, hierarchy, and goals; each time the means in place is overloaded, add the next process, or step back.

  1. Rules, hierarchy, and goals
  2. Direct contact
  3. Liaison roles
  4. Task forces
  5. Teams
  6. Integrating roles
  7. Managerial linking roles
  8. Matrix

Rules, hierarchy, and goals. Coordination runs through rules and programs, referral up the hierarchy, and goal setting, with no designed lateral links.Lateral mechanisms, level 1 of 5: Hierarchy, rules, and goals only.Direct contact. Managers who share a problem settle it between themselves.Lateral mechanisms, level 2 of 5: Direct contact and liaison roles.Liaison roles. Where contact between two departments is heavy, a liaison role is set up to handle it.Lateral mechanisms, level 2 of 5: Direct contact and liaison roles.Task forces. Temporary groups of representatives from several departments solve shared problems.Lateral mechanisms, level 3 of 5: Task forces and teams.Teams. Recurring problems turn the temporary groups into permanent teams.Lateral mechanisms, level 3 of 5: Task forces and teams.Integrating roles. A product, program, or project manager integrates across departments, at first with expert power only.Lateral mechanisms, level 4 of 5: Integrating roles and managerial linking roles.Managerial linking roles. The integrating manager gains formal power over budgets.Lateral mechanisms, level 4 of 5: Integrating roles and managerial linking roles.Matrix. Two lines of authority are held at once, so some positions report both to a function and to a product or project.Lateral mechanisms, level 5 of 5: Matrix.

His three other strategies, beside the ladder: slack resources, self-contained tasks, and vertical information systems.

Galbraith's order: the processes 'evolve as follows with increases in uncertainty', each taken up when the one before no longer suffices. The figure takes no uncertainty input and shows no cost per step: he gives none, saying only that more lateral relations mean more managerial intensity.

  1. Rules, hierarchy, and goals. Coordination runs through rules and programs, referral up the hierarchy, and goal setting, with no designed lateral links. Level 1 of 5: Hierarchy, rules, and goals only.
  2. Direct contact. Managers who share a problem settle it between themselves. Level 2 of 5: Direct contact and liaison roles.
  3. Liaison roles. Where contact between two departments is heavy, a liaison role is set up to handle it. Level 2 of 5: Direct contact and liaison roles.
  4. Task forces. Temporary groups of representatives from several departments solve shared problems. Level 3 of 5: Task forces and teams.
  5. Teams. Recurring problems turn the temporary groups into permanent teams. Level 3 of 5: Task forces and teams.
  6. Integrating roles. A product, program, or project manager integrates across departments, at first with expert power only. Level 4 of 5: Integrating roles and managerial linking roles.
  7. Managerial linking roles. The integrating manager gains formal power over budgets. Level 4 of 5: Integrating roles and managerial linking roles.
  8. Matrix. Two lines of authority are held at once, so some positions report both to a function and to a product or project. Level 5 of 5: Matrix.

Galbraith gives an order, not thresholds: as uncertainty rises, each lateral process is taken up when the one before no longer suffices, up to the matrix, and the more of them in use, the greater the managerial intensity. Beside the ladder he names three other strategies: slack resources, self-contained tasks, and vertical information systems.

Source: Galbraith 1974; Galbraith 1973.

First, decide which of two things you are describing: the chart or the practice. Lincoln, Hanada, and McBride (1986), a survey of 55 American and 51 Japanese manufacturing plants, found the Japanese plants had greater formal but less de facto centralization. Aghion and Tirole (1997), a formal model, show that real authority, unlike the formal right to decide, follows information. Wulf (2012), summarizing for managers her panel studies with interviews in seven firms, argues that flattened firms show more control at the top; the panel study itself (Rajan and Wulf 2006, more than 300 large firms) read the flattening partly as delegation, not simply centralization or decentralization. Meyer and Rowan (1977), a work of theory, hold that formal structures are often adopted for legitimacy and decoupled from the work. Fligstein (1985), a multi-firm historical statistical study, and Palmer, Jennings, and Zhou (1993), a multi-firm statistical study of adoption, found imitation among the causes of the multidivisional form's spread. Donaldson (1995), a book-length critique, argues the evidence for fit-driven adjustment is stronger, and Kraatz and Zajac (1996), a longitudinal study of 631 private liberal arts colleges, found little support for neoinstitutional predictions, though the change they studied was curricular. The form profiles describe formal designs, mostly by our reading of their sources, so they sit closer to the chart; if your practice differs, profile both.

Second, if parts of the organization answer differently, one level for the whole hides them. Our reading: profile each major unit, read the forms each is nearest, and treat the whole as their arrangement.

Reading the nearest forms

The explorer's printed rule: for each form, count the ten counted dimensions on which your level equals the form's level; where the form spans two levels, a match on either counts; ties are shown as ties; nothing is weighted.

The levels are not equally firm: of the 451 profile cells, 301 rest on judgment, 137 on theory, and 13 on evidence, and 27 are contested. A match against a judgment cell is a match against our reading, and the counts below take each contested cell at its first view.

Where the sources set no level, a profile carries a judgment middle or span: the co-determined, distributed, and boundaryless forms overlay any operating structure, and the hybrid structure mixes mechanisms unit by unit. Process organization, project-based organization, and the distributed form each span two levels on five counted dimensions, most of those spans by our judgment. A high count against a broad profile says less than the same count against a narrow one.

Nine pairs overlap on all ten counted dimensions, so some profiles match both equally, among them the professional bureaucracy and the professional partnership. No pair is identical: other profiles separate each, and so does each entry's distinguishing feature.

Illustrative. A manufacturer with three product divisions, profiled as product grouping, medium specialization and formalization, moderate layers, power delegated to division heads, standardized outputs, direct contact and liaison roles, moderate differentiation, bureaucratic exchange, and closed boundaries, matches the hybrid structure on all ten counted dimensions and the multidivisional form on nine, though the hybrid's profile is mostly judgment middles. Under the second view of the multidivisional's contested lateral-mechanisms cell, from one historical case study and a survey of many firms, the liaison roles match too, a tie at ten. A high-volume plant inside one division (functional grouping, high specialization and formalization, tall layers, informal power with the analysts, standardized work, no designed lateral links, low differentiation, bureaucratic exchange, closed boundaries) matches the machine bureaucracy on all ten, with the functional structure and two others at seven. The functional count falls to six under the second view of its differentiation cell, from the same Lawrence and Lorsch study, and the algorithmically managed count under the second view of its decision-rights cell, a judgment from two studies of platform work. The research lab (functional grouping, high specialization, low formalization, moderate layers, power spread selectively, mutual adjustment, task forces and teams, moderate differentiation, bureaucratic exchange, selective boundaries) ties the boundaryless and co-determined forms at eight. Under the second view of its contested boundary-permeability cell, from two case studies, boundaryless leads alone at nine.

A count says which forms your structure looks like, not which fit your situation. Fit is the explorer's situation view, which uses only the selection form of fit: which structures go with which situations, not what a pairing adds to performance. The method itself is disputed. We read the Aston factors and Wagner's meta-analysis, which show some dimensions varying apart from others, as a reason to count them one at a time; Wagner himself concludes that dimensional research on structure now lacks a viable theoretical foundation. Configuration theory holds that the elements of a structure reinforce one another, and Meyer, Tsui, and Hinings (1993), an editorial overview, set the configurational approach apart from the contingency approach; our reading is that a count of separate matches can miss how those elements work together. Population ecology doubts adjustment itself: Hannan and Freeman (1984), a work of theory, hold that inertia keeps most organizations from adapting, so selection produces the correlation of structure with context. Donaldson (1995) replies that misfit lowers performance and prompts incremental adjustment toward fit, and that ecology understates managers' capacity to adapt; Donaldson (2001), that fits form a continuum, with most organizations at intermediate points, not in a few configurations.

Structure, process, people, or culture

The explorer covers macro structure; process and workflow design is in Workflow Topologies, job design and pay in People & Talent, and culture as such in Culture & Organizational Development. No study read here gives a sorting test; the records offer signs.

Goold and Campbell's nine tests of a design

Tick each test the design passes; under each test, the symptoms a failure tends to show.

  1. If it fails, look for: new opportunities starving for attention; rivals reaching the market first; routine work done a different way in every unit; head-office products that do not fit local markets; and new strategies announced while the structure stays the same.
  2. If it fails, look for: strategic initiatives that stall; support staff duplicated in every division; a head office seen as a cost that adds nothing; and central functions strained by many product lines.
  3. If it fails, look for: specialists bound by procedures written for routine work and problems no procedure covers, with no one trained to solve them.
  4. If it fails, look for: a design that cannot be put in place.
  5. If it fails, look for: a new venture smothered by the core business's rules; specialists bound by procedures written for routine work; and departments run alike though they face different markets.
  6. If it fails, look for: work stalling at the handoffs; turf wars between units; calendars full of coordination meetings; divisions competing for the same customers; support staff duplicated in every division; units hitting their numbers while the whole slips; no one owning the customer's experience from start to finish; each country running its own version of everything; integrators no one acts on; and autonomous units drifting apart.
  7. If it fails, look for: decisions queuing at the top; a head office seen as a cost that adds nothing; layers that relay and recheck; front-line warnings that never reach anyone who can act; and central functions strained by many product lines.
  8. If it fails, look for: strategic initiatives that stall; two-boss gridlock; coordination paid for in a business that barely changes; units hitting their numbers while the whole slips; no one owning the customer's experience from start to finish; staff functions no one can judge; and a small organization run on a large one's paperwork.
  9. If it fails, look for: new opportunities starving for attention; a rulebook that cannot keep up; rivals reaching the market first; and a reorganization every year or two.

The nine testsTests not passed: 9The design passes all nine tests.

Four tests check fit (market advantage, parenting advantage, people, and feasibility) and five check good design. A failed test points to symptoms in the explorer's diagnosis, and several symptoms belong to more than one test.

Source: Goold and Campbell 2002a; Goold and Campbell 2002b.

Some symptoms name no form. A strategy that keeps missing, whatever the structure, is in theory a misfit between contingencies that no structure removes (Burton and Obel 2004, the most developed scholarly fit model), and Child's (1972) strategic choice reads its remedy as a change of strategy, domain, or standard. A unit whose every redesign fixes one problem and creates another, because part of its work calls for fixed procedures and part for working things out as people go, is our description of the conflicting demands behind what Gresov and Drazin call tradeoff equifinality: several designs answer them, each at its own cost. A design blocked by laws, agreements with employees, or deeply embedded systems fails the feasibility test of Goold and Campbell (2002), a practitioner checklist, not a tested model.

Process or grouping. Work that stalls at the handoffs between departments has structural remedies, and the symptom list is contested on which ones. One view names process organization, the matrix, and team-based organization, its case for process organization resting on Hammer and Champy (1993), a practitioner book with no test. The other drops process organization: in Byrne and colleagues (2004), a survey of every medical center in one national health system, joined to administrative data, service lines, which group clinical work across departments, had no positive and several negative effects; taking service lines as a process organization is our reading. Our reading, from Thompson's rule: if the most interdependent work already sits inside one unit and still stalls, look first at the flow; if it straddles units, the grouping is a candidate.

Thompson's three kinds of interdependence

Choose a type to see how three units depend on one another, what the type includes, and the coordination it needs.

Unit AUnit BUnit CShared resourcesUnit AUnit BUnit CUnit AUnit BUnit C
What it meansUnits contribute separately to a common whole and draw on shared resources, but do not depend on each other's work directly.What it includesNothing below it; it is the base type.The coordination it needsCoordination by standardization.Its place in Thompson's orderFirst of three, the least costly.What it meansOne unit's output is the next unit's input, in a fixed order.What it includesPooled interdependence as well.The coordination it needsCoordination by plan.Its place in Thompson's orderSecond of three.What it meansUnits' outputs feed each other back and forth, so each must adjust to the others as the work proceeds.What it includesPooled and sequential interdependence as well.The coordination it needsCoordination by mutual adjustment.Its place in Thompson's orderThird of three, the most costly.

Thompson's rule: pooled, sequential, and reciprocal interdependence rise in that order, each includes the ones below it, and they pair with coordination by standardization, by plan, and by mutual adjustment, in rising order of cost.

TypeWhat it meansIncludesCoordinationCost
PooledUnits contribute separately to a common whole and draw on shared resources, but do not depend on each other's work directly.Nothing below it; it is the base type.By standardizationFirst of three, the least costly
SequentialOne unit's output is the next unit's input, in a fixed order.Pooled interdependence as well.By planSecond of three
ReciprocalUnits' outputs feed each other back and forth, so each must adjust to the others as the work proceeds.Pooled and sequential interdependence as well.By mutual adjustmentThird of three, the most costly

Each type includes the ones below it, and the ways to coordinate them rise in cost: standardization for pooled work, plans for sequential work, and mutual adjustment for reciprocal work. The pairing and the order of cost are Thompson's; the field evidence is Van de Ven and colleagues', whose study in one agency largely supported their hypotheses relating task uncertainty, interdependence, and unit size to the mix of impersonal, personal, and group coordination modes.

Source: Thompson 1967; Van de Ven and colleagues 1976, a quantitative study of 197 work units in one agency.

People or design. Goold and Campbell count the people test among their four fit tests: "Does the design adequately reflect the motivations, strengths, and weaknesses of the available people?" The reverse also happens: a formal change that people have not yet enacted. Lee (2024), one ethnographic case study, concludes that decentralization is an ongoing collective process, not a one-time structural change.

Culture or differentiation. Departments that differ in goals, time horizons, and style can look like a culture clash. Lawrence and Lorsch (1967), a multi-firm comparative field study of ten organizations in three industries, found that the high performers matched that differentiation to the diversity of their environments and integrated with devices proportioned to it; the sample is small and the measures are managers' perceptions. Tests of the contingency line it belongs to are split. Drazin and Van de Ven (1985), a quantitative study of 629 work units in two states' employment security agencies, supported the selection and systems forms of fit but not the interaction form. Pennings (1975), a quantitative field test of the structural-contingency model, found that fit did not explain effectiveness, a failure Donaldson (2001) puts down to methodological limitations. Schoonhoven (1981), a quantitative study of hospital operating room suites, found traditional contingency hypotheses unsupported but more precise interactive, nonmonotonic ones better supported. Our reading: such a difference is a design fact to integrate.

How far units differ, and the integration that holds them together

Compare the units on the four orientations, judge how far apart they are, and choose a level to see the integrating device the high performers used at it.

What to compare between the units

  • Goal orientation
  • Time orientation
  • Interpersonal orientation
  • Formality of structure
Low differentiation, light integration. Units resemble each other in goals, time horizons, interpersonal style, and formality, and the hierarchy and its procedures integrate them.What the high performers usedThe managerial hierarchy.Where the study found itContainers.Moderate differentiation, some integrating roles. Units differ in some orientations, and individual integrators or committees join them alongside the hierarchy.What the high performers usedIndividual integrators.Where the study found itFood.High differentiation, heavy integration. Units differ sharply, and an integrating department, cross-unit teams, and open confrontation of conflict are needed to hold them together.What the high performers usedAn integrating department and cross-functional teams.Where the study found itPlastics.

The figure has no formula: Lawrence and Lorsch scored differentiation from managers' perceptions, on measures of their own that this figure does not reproduce, so the level is the reader's judgment.

LevelWhat it meansWhat the high performers usedWhere
Low differentiation, light integrationUnits resemble each other in goals, time horizons, interpersonal style, and formality, and the hierarchy and its procedures integrate them.the managerial hierarchycontainers
Moderate differentiation, some integrating rolesUnits differ in some orientations, and individual integrators or committees join them alongside the hierarchy.individual integratorsfood
High differentiation, heavy integrationUnits differ sharply, and an integrating department, cross-unit teams, and open confrontation of conflict are needed to hold them together.an integrating department and cross-functional teamsplastics

In Lawrence and Lorsch's ten firms, the high performers matched their integrating devices to how far their functional departments differed: the managerial hierarchy in containers, individual integrators in food, and an integrating department and cross-functional teams in plastics.

Source: Lawrence and Lorsch 1967a, a multi-firm comparative field study.

When the signs point to structure, the entries give each form's costs and failures; Change & Transformation covers the change.