Organizational structures
Organizational Structures - Mechanistic and Organic Structures Podcast Transcript
Speakers: Scott, Dine, Lock Collins
Scott: Hey everybody, welcome! We're going to have a great discussion today about the core components of organizational structures. Namely the mix of centralization and decentralization and how they factor into the two major types of organizations: mechanistic organizations and organic organizations.
Diane: Then we’ll talk about two prime examples of each organization to give you a sense of, not which structure is better, but rather, why a corporation would choose one structure over the other.
Scott: Well, let’s go over decentralization and centralization, because it seems like those are core principles of how corporations are structured.
Diane: They are, and really what it comes down to is: What type of framework does the company want? How do they see managing business operations?
Scott: Does a lot of the decision come down to company size? It would seem to me that smaller companies would have a smaller framework.
Diane: Would it surprise you if I said that often times the reverse is actually true?
Scott: Actually, it would! (laughs). What’s the reason for it?
Diane: Smaller companies are often operating with limited resources, so the business owner has to be more responsible for large decisions. In this way, there is a pyramid effect to management.
Scott: Meaning the top of the pyramid makes the most decisions, and fewer decisions are made as it widens down to the base from there.
Diane: Precisely. Large corporations can’t have just one person making every single decision, especially when we start talking about multi-national corporations. The corporate world is a complex place, and that complexity breeds innovation of management strategies. With that, you get a decentralized model.
Scott: Now obviously, this isn’t the case all the time, correct?
Diane: Exactly. And as a matter of fact, the examples
Speakers: Scott, Dine, Lock Collins
Scott: Hey everybody, welcome! We're going to have a great discussion today about the core components of organizational structures. Namely the mix of centralization and decentralization and how they factor into the two major types of organizations: mechanistic organizations and organic organizations.
Diane: Then we’ll talk about two prime examples of each organization to give you a sense of, not which structure is better, but rather, why a corporation would choose one structure over the other.
Scott: Well, let’s go over decentralization and centralization, because it seems like those are core principles of how corporations are structured.
Diane: They are, and really what it comes down to is: What type of framework does the company want? How do they see managing business operations?
Scott: Does a lot of the decision come down to company size? It would seem to me that smaller companies would have a smaller framework.
Diane: Would it surprise you if I said that often times the reverse is actually true?
Scott: Actually, it would! (laughs). What’s the reason for it?
Diane: Smaller companies are often operating with limited resources, so the business owner has to be more responsible for large decisions. In this way, there is a pyramid effect to management.
Scott: Meaning the top of the pyramid makes the most decisions, and fewer decisions are made as it widens down to the base from there.
Diane: Precisely. Large corporations can’t have just one person making every single decision, especially when we start talking about multi-national corporations. The corporate world is a complex place, and that complexity breeds innovation of management strategies. With that, you get a decentralized model.
Scott: Now obviously, this isn’t the case all the time, correct?
Diane: Exactly. And as a matter of fact, the examples