ABSTRACT
This chapter presents an adaptive model of organization design that provides guidance to managers engaged in structuring modern organizations. It begins by discussing the concept of organizational effectiveness, which is the ultimate goal of structural management. Organization design is the process of making these choices. In this process, managers diagnose the situation confronting their organization and then select and implement the structure that seems most appropriate. An effective organization must also satisfy the demands of the various constituency groups that provide it with the resources necessary for its survival. Organizational efficiency means minimizing the raw materials and energy consumed by the production of goods and services. Differences in the efficiency and flexibility of mechanistic and organic structures are also attributable to differences in centralization. Company age and stage of development are life-cycle contingencies associated with organizational growth. As organizations age and mature, they often grow out of one type of structure and into another.
