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118 Part One Organizations, Management, and the Networked Enterprise

Microsoft, reaped the rewards. Citibank’s ATMs revolutionized retail banking,
but they were copied by other banks. Now all banks use ATMs, with the benefits
going mostly to the consumers.

Organizational Structure
All organizations have a structure or shape. Mintzberg’s classification, described
in Table 3.2, identifies five basic kinds of organizational structure (Mintzberg,
1979).
The kind of information systems you find in a business firm—and the nature
of problems with these systems—often reflects the type of organizational
structure. For instance, in a professional bureaucracy such as a hospital, it is
not unusual to find parallel patient record systems operated by the administra-
tion, another by doctors, and another by other professional staff such as nurses
and social workers. In small entrepreneurial firms, you will often find poorly
designed systems developed in a rush that often quickly outgrow their useful-
ness. In huge multidivisional firms operating in hundreds of locations, you will
often find there is not a single integrating information system, but instead each
locale or each division has its set of information systems.

Other Organizational Features
Organizations have goals and use different means to achieve them. Some
organizations have coercive goals (e.g., prisons); others have utilitarian goals
(e.g., businesses). Still others have normative goals (universities, religious
groups). Organizations also serve different groups or have different constitu-
encies, some primarily benefiting their members, others benefiting clients,
stockholders, or the public. The nature of leadership differs greatly from one
organization to another—some organizations may be more democratic or
authoritarian than others. Another way organizations differ is by the tasks they
perform and the technology they use. Some organizations perform primarily

TABLE 3.2 ORGANIZATIONAL STRUCTURES
ORGANIZATIONAL TYPE DESCRIPTION EXAMPLES
Entrepreneurial structure Young, small firm in a fast-changing environment. It has a simple Small start-up business
structure and is managed by an entrepreneur serving as its single
chief executive officer.

Machine bureaucracy Large bureaucracy existing in a slowly changing environment, Midsize manufacturing firm
producing standard products. It is dominated by a centralized
management team and centralized decision making.

Divisionalized bureaucracy Combination of multiple machine bureaucracies, each producing a Fortune 500 firms, such as General
different product or service, all topped by one central headquarters. Motors

Professional bureaucracy Knowledge-based organization where goods and services depend Law firms, school systems, hospitals
on the expertise and knowledge of professionals. Dominated by
department heads with weak centralized authority.

Adhocracy Task force organization that must respond to rapidly changing Consulting firms, such as the Rand
environments. Consists of large groups of specialists organized into Corporation
short-lived multidisciplinary teams and has weak central
management.

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