GSM Lecture 7

Management > Global Strategic Management > Organising > Determinants of structure

Determinants of structure

The structure that an organisation adopts depends on the following factors:

• The nature of business activities
• The external environment
• Geographical diversification of the firm
• The age, size, history and culture of the organisation
• The size of the business
• Communications technology within the firm
• Leadership and leadership style

Burns and Stalker (1961) studied the determinants of corporate structure, observing how firms adjusted to the changing environment. They found two types of structure:

1. Mechanistic organisations, which had rigid structures
2. Organic organisations which had flexible structures, adaptable to change

So, which comes first, strategy or structure?

Chandler (1962) argues that "strategy precedes structure", while Minzberg (1979) believes that strategy and structure are interrelated.

Key attributes of corporate structure

Types of international structure

International structures - detail

Global structures - detail

Matrix structure

Matrix structure - detail

Extra information