Three major contingency factors that affect organization design include strategy, size, and technology. Strategy affects organization design in that structure should change as an organization's strategy changes. Size affects organization design because as organizations grow, they tend to become more formalized and bureaucratic. Finally, technology affects organization design because the production process should fit with the type of organization structure in order to be effective. Mechanistic organizations are high in complexity, formalization, and centralization.
Organic organizations are low in complexity, formalization, and centralization.
These organizations also face design issues regarding complexity, formalization, and centralization. Obviously, team-based structures and boundaryless organizations are going to have minimal formalization and centralization. This could create some coordination and control problems for managers. However, these disadvantages could be minimized by having mechanisms in place to manage conflicts over coordination and control.