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Despite these downsides, however, mechanistic structures have advantages
when the environment is more stable. The main advantage of a mechanistic structure
is its efficiency. Therefore, in organizations that are trying to maximize efficiency
and minimize costs, mechanistic structures provide advantages. For example,

McDonald’s has a famously bureaucratic structure where employee jobs are highly
formalized, with clear lines of communication and specific job descriptions. This
structure is an advantage for them because it allows McDonald’s to produce a
uniform product around the world at minimum cost. Mechanistic structures can also
be advantageous when a company is new. New businesses often suffer from a lack of
structure, role ambiguity, and uncertainty. The presence of a mechanistic structure
has been shown to be related to firm performance in new ventures. [11]
In contrast to mechanistic structures, organic structures are flexible and
decentralized, with low levels of formalization. In Organizations with an organic
structure, communication lines are more fluid and flexible. Employee job
descriptions are broader and employees are asked to perform duties based on the
specific needs of the organization at the time as well as their own expertise levels.
Organic structures tend to be related to higher levels of job satisfaction on the part of
employees. These structures are conducive to entrepreneurial behavior and
innovativeness. [12] An example of a company that has an organic structure is the
diversified technology company 3M. The company is strongly committed to
decentralization. At 3M, there are close to 100 profit centers, with each division
feeling like a small company. Each division manager acts autonomously and is
accountable for his or her actions. As operations within each division get too big and
a product created by a division becomes profitable, the operation is spun off to create
a separate business unit. This is done to protect the agility of the company and the
small-company atmosphere. [13]
KEY TAKEAWAY
The degree to which a company is centralized and formalized, the
number of levels in the company hierarchy, and the type of departmentalization
the company uses are key elements of a company’s structure. These elements
of structure affect the degree to which the company is effective and innovative
as well as employee attitudes and behaviors at work. These elements come
together to create mechanistic and organic structures. Mechanistic structures
are rigid and bureaucratic and help companies achieve efficiency, while organic
structures are decentralized, flexible, and aid companies in achieving
innovativeness.
EXERCISES
1. What are the advantages and disadvantages of decentralization?
2. All else being equal, would you prefer to work in a tall or flat
organization? Why?
3. What are the advantages and disadvantages of departmentalization by
product?

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