Constancy and change: Flexible organization structures

Abstract

Management organization structure is the most sensitive characteristic displayed by a business organization in the process of its adaptation to the changing environment. It is well-known, however, that excessive changeability of the structure makes the management system unstable and leads to less effective organizational behavior. The author believes that the reason lies in the fact that the structural changes almost always involve the management system's composition too. This shortcoming is rarely found in matrix management of goal-oriented programs. However, application of this type of management structure is limited as complexity of management increases disproportionately. Systems analysis of the problem situation leads to two new conclusions: (a) the variety of management organization structures required by business organizations to adapt to the changing environment can be extended if the organizational relations are regarded as part of organizational/economic symbiosis and their interrelated change; and (b) enhancement of the program component in the matrix structure makes it possible to design stable manage-management structures with a dynamic composition. Implementation of this concept in large-scale business systems brought about essentially new forms of production units' self-organization that became known as state production associations. It makes the large-scale business organizations' structures far less complex and increase their flexibility without disturbing the management systems' resilience. The newly developed principles of organizational design are universal.