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But that structure has become more complex as the company’s size and global reach have fostered levels of decentralization that allowed outlets in India to offer vegetarian cuisine and those in France to run ads attacking Americans and American beef (Tagliabue, 1999; Stires, 2002; Arndt, 2007).

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Understanding linkages among goals, structure, and strategy requires a look beyond formal statements of purpose. Schools, for example, are often criticized if structure does not coincide with the of!cial goal of scholastic achievement. But schools have other, less visible goals. One is character development, often espoused with little follow-through. Another is the taboo goal of certi!cation and selection, as schools channel students into tracks and sort them into careers. Still a third goal is custody and control—keeping kids off the streets, out from underfoot and temporarily away from the job market. Finally, schools often herald honori!c goals such as excellence. Strategy and goals shape structure, but the process is often complex and subtle (Dornbusch and Scott, 1975).

Information Technology New technologies continue to revolutionize the amount of information available and the speed at which it travels. Once accessible exclusively to top-level or middle managers, information is now easy to get and widely shared. New media have made communica- tion immediate and far reaching. With the press of a key, anyone can reach another person—or an entire network. All this makes it easier to move decisions closer to the action.

In the 2003 invasion of Iraq, for example, U.S. and British forces had an obvious advantage in military hardware. They also had a powerful structural advantage because their superior information technology let them deploy a much more “exible and decentralized command structure. Commanders in the !eld could change their plans immediately in response to new developments. Iraqi forces, meanwhile, had a much slower, more vertical structure that relied on decisions from the top. A major reason that Iraqi resistance was lighter than expected in the early weeks was that commanders had no idea what to do when they were cut off from their chain of command (Broder and Schmitt, 2003).

Later, however, the structure and technology so effective against Iraq’s military hadmore dif!culty with an emerging resistance movement that evolved into a loosely connected structure of entrepreneurial local units that could adapt quickly to U.S. tactics. New technologies like the Internet and cell phones enabled the resistance to structure itself as a network of loosely connected units, each pursuing its own agenda in response to local conditions. The absence of strong central control in such networks can be a virtue because

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local units can adapt quickly to new developments and the loss of any one outpost does little damage to the whole.

Nature of the Workforce Human resource requirements have also changed dramatically in recent decades. Many lower-level jobs now require higher levels of skill. A better-educated workforce expects and often demands more discretion in daily work routines. “Millennials” typically ask for higher salaries and more favorable working conditions than their predecessors. Increasing specialization has professionalized many functions. Professionals typically know more than their supervisors about technical aspects of their work. They expect autonomy and prefer reporting to professional colleagues. Trying to tell a Harvard professor what to teach is an exercise in futility. In contrast, giving too much discretion to a low-skilled McDonald’s worker could become a disaster for both employee and customers.

Dramatically different structural forms are emerging as a result of changes in workforce demographics. Deal and Kennedy (1982) predicted early on the emergence of the atomized or network organization, made up of small, autonomous, often geographically dispersed work groups tied together by information systems and organizational symbols. Drucker makes a similar observation in noting that businesses increasingly “move work to where the people are, rather than people to where the work is” (1989, p. 20).

Challenges of Global Organization In sum, numerous forces affecting structural design create a knotty mix of challenges and tensions. It is not simply a matter of deciding whether we should be centralized like McDonald’s or Amazon or decentralized like Harvard or Zappos. Many organizations !nd that they have to do both and somehow accommodate the competing structural tensions.

Two electronics giants, Panasonic (formerly Matsushita) in Japan and Philips in the Netherlands, have competed with one another around the globe for more than half a century. Historically, Panasonic developed a strong headquarters, while Philips was more decentralized, with strong units in different countries. The pressures of global competi- tion pushed both to become more alike. Philips struggled to gain the ef!ciencies that come from selling the same products around the world. Meanwhile, as Panasonic gradually discovered, “No company can operate effectively on a global scale by centralizing all key decisions and then farming them out for implementation. It doesn’t work . . . No matter how good they are, no matter how well supported analytically, the decision-makers at the center are too far removed from individual markets and the needs of local customers” (Ohmae, 1990, p. 87).

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CONCLUSION The structural frame looks beyond individuals to examine the social architecture of work. Though sometimes equated with red tape, mindless memos, and rigid bureaucrats, the approach is much broader and more subtle. It encompasses the freewheeling, loosely structured entrepreneurial task force as well as the more tightly controlled railway company or postal department. If structure is overlooked, an organization oftenmisdirects energy and resources. It may, for example, waste time and money on massive training programs in a vain effort to solve problems that have much more to do with social architecture than with people’s skills or attitudes. It may !re managers and bring in new ones, who then fall victim to the same structural “aws that doomed their predecessors.

At the heart of organizational design are the twin issues of differentiation and integra- tion. Organizations divide work by creating a variety of specialized roles, functions, and units. They must then use both vertical and horizontal procedures to mesh the many elements together. There is no one best way to organize. The right structure depends on prevailing circumstances and considers an organization’s goals, strategies, technology, people, and environment. Understanding the complexity and variety of design possibilities can help create formal prototypes that work for, rather than against, both people and collective purposes.

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4 c h a p t e r

Structure and Restructuring

When society requires to be rebuilt, there is no use in attempting to rebuild it on the old plan.

—John Stuart Mill

In 2004, a crisis over journalistic standards ensnared the British Broad- casting Corporation (BBC) in a !urry of parliamentary hearings, resigna-

tions, and public recrimination. The controversy so tarnished the respected institution’s reputation that top of”cials took steps to ensure that it would never happen again.

They initiated a number of structural changes: a journalism board to monitor editorial policy, guidelines on journalistic procedures, forms to !ag trouble spots that managers were required to complete, and a 300-page volume of editorial guidelines. The cumulative effect of the changes was a multilayered bureaucracy that limited managerial discretion and fostered a hierarchy of approve-disapprove boxes. These were to be passed up the chain of command as an alternative to probing questions at lower levels in the organization.

Some cures make the patient worse, and this newly restructured system resulted in two crises more damaging than the one in 2004. In October 2012, the BBC came under heavy “re when it became known that it had broadcast a glowing tribute to a well-known former BBC TV host, Jimmy Savile, but killed an investigative report detailing evidence that Savile had been a serial child molester. The following month, the BBC aired a report wrongly accusing a member of Margaret Thatcher’s government of being a pedophile.


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