An Analysis of Organizational Structure in Process Variation

In today’s uncertain and dynamic market environment, the need for organizational structures that can respond to persistent improvement in organizational processes is more critical than ever. Current organizational studies emphasize categorized processes and structures, lacking any development of continuity in the temporal and spatial layers of environmental change. In this study, organizational structure is seen as varying according to departmentalization and assignment, whereas the process environment changes with information dependency and complexity. We develop a systemic framework, comparing our results with industrial data from the global automotive industry. We then extend the model to analyze variations in organizational structure in response to both static and dynamic process environments with varying communication costs. As will be demonstrated, organizational structures are stable at certain degrees during continuous process change. These same structures are able to fit multiple processes into a cycle of continuous improvement. This stability is also evaluated in situations where processes vary along different directions. And finally, in response to the need for organizational restructuring, we provide a set of strategic guidelines for managers to apply in process variation.