ABSTRACT

Structural contingency theory is one established approach to organizational design. It holds that, in order to produce high performance, the structure of an organization needs to fit the contingencies of the organization (Burns and Stalker 1961; Burton, Lauridsen, and Obel 2002, 2003; Donaldson 2001; Van de Ven, Ganco, and Hinings 2013). More precisely, for high performance, the level of the structural variables, such as formalization, centralization, and specialization needs to fit the level required by the contingency variable. There is a contingency imperative: the contingency determines the structure that is required for the organization to avoid loss of performance, so the organization tends to adopt that structure (Donaldson 1982).