Strategy & Structural Dimensions-A Comparative Study of Four Industries (2014)

Introduction Organization Structure is a dynamic element which can change over time as a consequence of new organizational and environmental conditions. It reflects way in which information and knowledge are distributed within an organization and it substantially influences distribution and coordination of company's resources, communication processes and social interaction between organizational members (Chen & Huang, 2007). It can be frequently customized so that staff could have access to and acquire new and varied knowledge that would help them to overcome a range of problems, fluctuations and diverse situations (Lloria, 2007). Studies (e.g., Dodgson, 1993; Fiol & Lyles, 1985) also have suggested that structures have an influence on organization's learning ability. Researchers further suggest that organizational personnel are meaningless unless some type of structure is used to assign people to tasks and connect activities of different people or functions (Denison, 2000; Drucker, 1974). Organizational structure may obstruct or support capacity of organization to adapt, innovate or improve its ability to add value for its customers and to its performance. One of purposes of study was to understand organizational strategy and structure in Indian organizations belonging to different industry segments. It also examines relationship between strategy and structure. Although, there have been rich theoretical and empirical descriptions about structure and strategy (e.g., Schaffer & Litschert, 1990; Tse, 1991), this study intends to examine it further in Indian context. The rationale behind are that Indian culture is different from western culture. Research suggests that when national and organizational cultures come into conflict, national culture is likely to dominate (Hofstede, 1980; Pang et al., 1998). Peters and Waterman (1982) and others reported that organizations in United States (US) are influenced by national cultural values: there have been focus on open and honest communication and teamwork and staff are being empowered to make decisions (Mwaura et al., 1998). Hofstede (1980) found that in cultures with high power distance relationships, employees have limited expectations for participation in decision making. Given such cultural considerations, findings pertaining to relationships between strategic orientation, organization structure and performance may not apply in Indian cultural context, as Indian culture has been rated high on power distance and also differ on other value dimensions from US culture. Organizational Structure Child (1972) defined organizational structure as the formal allocation of work roles and administrative mechanisms to control and integrate work activities including those which cross formal organizational boundaries. Daft (1998) stated that organization structure determines formal reporting communications and represents levels which exist in administrative hierarchy and also specifies extent of managers' control. The people's formal communications, job status in an organization, extent of accessing information, job descriptions, resource allocation, rules and regulations, compliance and implementing rules, co-ordination between activities, depend on designing organizational structure (Ergenli et. al., 2007). To understand organizational structure, number of structural dimensions has been identified in various studies. Among many structural dimensions, formalization, integration, centralization and complexity are commonly used in describing structural characteristics. Centralization is degree to which employees are empowered to make decisions. When decisions are kept at top, an organization is centralized, whereas in decentralized organizations, decisions are delegated to lower organizational levels (Daft, 1998). …