Environmental uncertainty and organizational structure: a product management perspective

Abstract

The effectiveness of marketing activities in firms with product management is, in part, determined by the extent to which the organizational structure is aligned with the uncertainties in the marketplace. Investigates the relationship between various dimensions of firm′s marketing organizational structure (i.e. centralization, formalization and structural differentiation) and the degree to which the product manager confronts environmental uncertainty. Claims the empirical results indicate that the organizational structure which applies to the product manager is related to uncertainty in the market environment of the firm and that product managers′ authority is not matched to the degree of uncertainty in the environment. Discusses the implications of these results in terms of the product manager′s performance in varying organizational structures.