Organizational processes
Organizational processes
This domain covers organization-level design and the processes that coordinate work: structure, culture, decision making, and stress. Questions ask you to diagnose misfit between strategy, environment, and design.
Structure and environment
Functional structure groups by expertise and supports efficiency; divisional groups by product, customer, or geography and supports accountability; matrix combines both and creates dual authority, requiring strong conflict resolution. Span of control, centralization, formalization, and hierarchy describe how tall or flat an organization is. Burns and Stalker distinguish mechanistic systems (routine, stable) from organic systems (uncertain, innovative). Woodward linked technology to structure: unit, mass, and process production. Lawrence and Lorsch argued that uncertain environments require differentiation with integration.
Culture and decisions
Schein's levels are artifacts, espoused values, and basic assumptions. The competing values framework names clan, adhocracy, market, and hierarchy cultures. Strong cultures can improve coordination but become liabilities when core assumptions fit an old environment. Decision making is bounded by Simon's bounded rationality and satisficing; escalation of commitment keeps failing courses funded. Group techniques include brainstorming, nominal group technique, and Delphi. Stress models include demand–control (high demands with low control harms health) and effort–reward imbalance; burnout combines exhaustion, cynicism, and reduced efficacy.
Worked example
A software firm in a fast-changing market has a tall, rule-heavy structure with product decisions centralized at headquarters. Response time is slow. Diagnosis: mechanistic design fitted a stable past, not an uncertain present. Prescription: decentralize decisions, create small product teams with integration roles, and shift culture toward adhocracy while retaining financial controls.
Traps
Matrix is not universally best; it creates ambiguity and must be managed. Strong culture is not automatically good. Satisficing is not irrational stupidity; it is bounded rationality under search costs. Culture is not just ceremonies and slogans; basic assumptions drive behavior. Centralization can be appropriate in crises.