Organizational Structure and Process—An Analysis in Decision-Making

Abstract

It is known that the performance of an organization is highly related to the process through which activities are organized. However, the dyadic relationship between organizational structure and process along with their influence on performance become complicated when faced with complex activities. We explore this relationship and its influence by following three lines of study. First of all, in a setting of product development, we introduce a process model for organizing concurrent activities. We show how to determine an optimal schedule. The results demonstrate the variation of design performance, i.e., lead-time, rework, and total workload, under a set of different overlapping strategies. Although depending on the setting of case incidences, there generally exists no dominant strategy over all the performance measures. As a result, managers should select the strategy based on preference over the measures. Secondly, we address the question of how should an organization be structured in a static as well as dynamic process variation. Organizational form will be changed along two dimensions, i.e., departmentalization and assignment, whereas process evolves in terms of complexity. In addition to improving the alignment of organizational structure with a static process, we emphasize and study strategic guidelines of restructuring in the presence of a dynamic environment. The last line of study is geared towards evaluating a group of organizations which differ in preference. In the form of decision process, team specialty, and communication structure, we show the comparative performance between two stylized decision processes, i.e., hierarchy and polyarchy, with or without communication between agents in an environment where each project must be determined by two features

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