The Effect of Competition on Some Dimensions of Organizational Structure

Abstract

decision proceduLres are specified in advance and weakly associated with a relatively taller organizational strtuctuire. Evidence is also presented indicatting that the competitiveness of an organization's environment interacts with produlction technology, the number of products, and the extent of product design and produiction process change in determining organizational structure. Change in product design and produtction process, and the number of products are associated with decentralization, less formalization, and more depairtments only in the less competitive environmental contexts. Extent of competition, one dimension of an organization's environment, has played a prominent part in economic theory, but has not often been studied by organization theorists. Rose (1955) examined the effects of competition and conflict on 91 voluLntary associations in the Minneapolis and St. PaLul area. He fotund that grouips faced with competition were more active, more likely to develop a complex structuLre; more likely to meet freqtuently, and to be more flexible in activities and techniqLues; and more likely to have a more cohesive relationship among their members than groups facing neither competition nor conflict. Simpson and GuLlley (1962), also examining voluntary associations, tested the general hypothesis that the