Page 35 - Managing Change in Organizations

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Chapter 2 ■ Organization structures: choice and leadership
besides what we normally understand as objectivity, rationality and purpose.
When making decisions people are constrained by past decisions and by the
culture of the organization. Many individual and group inputs are made in a
decision process, and the outcome may be a decision that nobody particularly
supports or feels committed to.
Decisions are often based on inadequate, and even conflicting, information.
Moreover, decisions are sequential rather than once and for all processes.
Commitment and support for the implementation of a decision are crucial fac-
tors. Decisions are not complete until the necessary resources are applied in the
appropriate manner. Delay or scaling down of resources may change a decision
subsequent to the meeting where the decision was apparently taken. These are
issues to which we shall be returning in a later chapter.

The dilemmas of organization

For all these reasons, too much concentration on the management structure itself
can be misleading. Managers are often designing and redesigning the manage-
ment structure, assigning different responsibilities and resources to divisions and
departments. Decisions about the management structure pose a number of dilem-
mas which must be resolved if organizations are to be managed effectively. But
by ‘resolved’ we do not mean once and for all. We mean resolved in the internal
and external circumstances of the organization at any point in time. There are six
main dilemmas, as follows:
1 Centralization vs decentralization.
2 Global vs local.
3 Efficiency vs effectiveness.
4 Professionals vs line management.
5 Control vs commitment.
6 Change vs stability.

Centralization versus decentralization
Once upon a time it was not relevant to ask managers ‘Is your organization cen-
tralized or decentralized?’ but, rather, ‘In what direction is it going this year?’
There seemed to be a cyclical process at work. In good times when markets were
growing, organizations decentralized to encourage local initiative in what
might be varied local markets and circumstances. In tougher periods when mar-
kets were ‘tight’ and income generation a problem, organizations centralized in
order to gain greater control over expenditure, employment policies and so forth.
However, the picture is complicated by the growth of organizations. Growth
from the small entrepreneurial business to the large and diversified conglomer-
ate seems to impose patterns of organizational design. There seem to be distinct
phases in the growth of an organization, each with its own tensions and its own
distinctive organizational solution, albeit not necessarily applied in pure form in

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