The Impact of Technology and Functional Unit on Centralization in Organizations

Abstract

Prior organization theory literature has proposed that either organization size, technology, or environment is the exclusive determinant of an organization `s structural configuration. Weaknesses in these existing structural determination models as regards the centralization structure dimension are discussed. Next, managerial discretion factors based on Child's strategic choice concept are added to the model. Last, methodology used and results obtained in an empirical investigation of the predictors for the centralization structure dimension in three process-oriented industries are reported. The explanatory power of the predictive model for centralization was enhanced substantially by inclusion of the functional unit as a moderator. However, only one of the three industries analyzed displayed evidence that the most commonly referenced antecedents of structure mentioned above were strong predictors of the centralization structure dimension.

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