pressures because they have limited capacity to claim the resources they need or to shape the results they are supposed to produce. In contrast, an institution like Harvard is insulated from such intrusions by its size, elite status, and large endowment. It can afford to offer low teaching loads, generous salaries, and substantial autonomy to its faculty. A Harvard diploma is taken as sufficient evidence that instruction is having its desired effect.
Strategy and Goals
Strategic decisions are future‐oriented, concerned with long‐term direction (Chandler, 1962; Mintzberg, 1994; Roberts, 2004). Across sectors, a major task of organizational leadership is “the determination of long‐range goals and objectives of an enterprise, and the adoption of courses of action and allocation of resources necessary for carrying out these goals” (Chandler, 1962, p. 13).
A variety of goals are embedded in strategy. In business firms, goals such as profitability, growth, and market share are relatively specific and easy to measure. Goals of educational or human services organizations are typically more diffuse: “producing educated men and women” or “improving individual well‐being.” This is another reason Harvard adopts a more decentralized, loosely integrated system of roles and relationships.
Historically, McDonald's had fewer, more quantifiable, and less controversial goals than those of Harvard. This aligned well with the centralized, top‐down McDonald's structure. But that structure has become more complex as the company's size and global reach have fostered levels of decentralization that allowed outlets in India to offer vegetarian cuisine and those in France to run ads attacking Americans and American beef (Arndt, 2007; Stires, 2002; Tagliabue, 1999).
Understanding linkages among goals, structure, and strategy requires a look beyond formal statements of purpose. Schools, for example, are often criticized if structure does not coincide with the official goal of scholastic achievement. But schools have other, less visible goals. One is character development, often espoused with little follow‐through. Another is the taboo goal of certification and selection, as schools channel students into tracks and sort them into careers. Still a third goal is custody and control—keeping kids off the streets, out from underfoot and temporarily away from the job market. When the Covid‐19 pandemic forced millions of students to stay home instead of going to school, the impact on families was often devastating. Finally, schools often herald honorific goals such as excellence. Strategy and goals shape structure, but the process is often complex and subtle (Dornbusch and Scott, 1975).
Information Technology
New technologies continue to revolutionize the amount of information available and the speed at which it travels. Information that was once accessible exclusively to top‐level or middle managers is now easy to get and widely shared. New media have made communication immediate and far‐reaching. With the press of a key, anyone can reach another person—or an entire network. All this makes it easier to move decisions closer to the action.
In the 2003 invasion of Iraq, for example, U.S. and British forces had an obvious advantage in military hardware. They also had a powerful structural advantage because their superior information technology let them deploy a much more flexible and decentralized command structure. Commanders in the field could change their plans immediately in response to new developments. Iraqi forces, meanwhile, had a much slower, more vertical structure that relied on decisions from the top. A major reason that Iraqi resistance was lighter than expected in the early weeks was that commanders had no idea what to do when they were cut off from their chain of command (Broder and Schmitt, 2003).
Later, however, the structure and technology so effective against Iraq's military had more difficulty with an emerging resistance movement that evolved into a loosely connected structure of entrepreneurial local units that could adapt quickly to U.S. tactics. New technologies like the Internet and cell phones enabled the resistance to structure itself as a network of loosely connected units, each pursuing its own agenda in response to local conditions. The absence of strong central control in such networks can be a virtue because local units can adapt quickly to new developments and the loss of any one outpost does little damage to the whole.
Nature of the Workforce
Human resource requirements have also changed dramatically in recent decades. Many lower‐level jobs now require higher levels of skill. A better‐educated workforce expects and often demands more discretion in daily work routines. Members of Gen Y and Gen Z (born between roughly 1980 and 2015) typically expect better pay and more favorable working conditions than their predecessors. Increasing specialization has professionalized many functions. Professionals typically know more than their supervisors about technical aspects of their work. They expect autonomy and prefer reporting to professional colleagues. Trying to tell a Harvard professor what to teach is an exercise in futility. In contrast, giving too much discretion to a low‐skilled McDonald's worker could become a disaster for both employee and customers.
Dramatically different structural forms are emerging as a result of changes in workforce demographics. Deal and Kennedy (1982) predicted early on the emergence of the atomized or network organization, made up of small, autonomous, often geographically dispersed work groups tied together by information systems and organizational symbols. Drucker made a similar observation in noting that businesses increasingly “move work to where the people are, rather than people to where the work is” (1989, p. 20). The Covid‐19 pandemic forced almost everyone who could to work from home, intensifying this trend.
Challenges of Global Organization
In sum, numerous forces affecting structural design create a knotty mix of challenges and tensions. It is not simply a matter of deciding whether we should be centralized like McDonald's and Amazon or decentralized like Harvard and Zappos. Many organizations find that they have to do both and somehow accommodate the competing structural tensions.
Two electronics giants, Panasonic (formerly Matsushita) in Japan and Philips in the Netherlands, have competed with one another around the globe for more than half a century. Historically, Panasonic developed a strong headquarters, while Philips was more decentralized, with strong units in different countries. The pressures of global competition pushed both to become more alike. Philips struggled to match Panasonic's efficiencies derived from selling the same products around the world. Meanwhile, Panasonic gradually discovered,
No company can operate effectively on a global scale by centralizing all key decisions and then farming them out for implementation. It doesn't work … No matter how good they are, no matter how well supported analytically, the decision‐makers at the center are too far removed from individual markets and the needs of local customers. (Ohmae, 1990, p. 87)
CONCLUSION
The structural frame looks beyond individuals to examine the social architecture of work. Though sometimes equated with red tape, mindless memos, and rigid bureaucrats, the approach is much broader and more subtle. It encompasses the freewheeling, loosely structured entrepreneurial task force as well as the more tightly controlled railway company or postal department. If structure is overlooked, an organization often misdirects energy and resources. It may, for example, waste time and money on massive training programs in a vain effort to solve problems that have more to do with social architecture than with people's skills or attitudes. It may fire managers and bring in new ones, who then fall victim to the same structural flaws that doomed their predecessors.
At the heart of organizational design are the twin issues of differentiation and integration. Organizations divide work by creating a variety of specialized roles, functions, and units. They must then use both vertical and horizontal procedures to mesh the many elements together. There is no one best
