Organization design

Milton Harris*, Artur Raviv

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

87 Scopus citations

Abstract

This paper attempts to explain organization structure based on optimal coordination of interactions among activities. The main idea is that each manager is capable of detecting and coordinating interactions only within his limited area of expertise. Only the CEO can coordinate companywide interactions. The optimal design of the organization trades off the costs and benefits of various configurations of managers. Our results consist of classifying the characteristics of activities and managerial costs that lead to the matrix organization, the functional hierarchy, the divisional hierarchy, or a flat hierarchy. We also investigate the effect of changing the costs of various managers on the nature of the optimal organization, including the extent of centralization.

Original languageEnglish (US)
Pages (from-to)852-865
Number of pages14
JournalManagement Science
Volume48
Issue number7
DOIs
StatePublished - Jul 2002

Keywords

  • Decentralization
  • Hierarchies
  • Internal organization
  • M-form
  • Organization design
  • U-form

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research

Fingerprint Dive into the research topics of 'Organization design'. Together they form a unique fingerprint.

Cite this