ORGANIZATION STRUCTURE AND DECISION MAKING

Organization Structure and Decision Making

Organization Structure and Decision Making

Introduction

Over the past decade there has been a growing realisation of the important contribution that decision making can have on firm performance. One of the earliest typologies examining decision making function configurations was Reck and Long's (1988, pp. 2-8) four stages of development, consisting of decision making configurations ranging from passive, independent, supportive and integrative. Our study helps shed light on the various configurations of a decision making function within today's organisations. The identification of this taxonomy should also facilitate the study of the evolution of decision making functions. We find that the development of decision making functions corroborates much of the previous work on decision making typologies, such as Reck and Long (1988, pp. 2-8). The findings are also useful for practitioners seeking to improve the performance and standing of the decision making function through identification of the characteristics and potential limitations faced at each phase.

Choosing which organizational structure to use largely depends on the size of the company, what is trying to be accomplished, and what resources are available. This paper will examine the three primary organizational structures mentioned above and the situation in which each structure would be the best method to manage a project team. In the functional project management organizational structure, “the project is assigned to the functional unit that has the most interest in ensuring its success or can be most helpful in implementing it” (Mantel & Meredith, 2006). This organizational structure has been considerably one of the oldest methods used however, remains one of the most successful. The functional method is best used when applied to routine work functions and to support the value of work standards. Under this organizational structure projects are usually assigned into two different ways consisting of assigning a project to a functional manager who coordinates with others to contribute or assigning the project to different departments who each complete their portion of the work and report to the department managers. Consequently, “organizational behavior is important because the functional employees at the interface position find themselves reporting to more than one boss, a line manager [assigned to control resources] and a project manager for each project they are assigned to” (Kerzner, 2006).

Literature review

Evolution of decision making

The literature has tracked the evolution of decision making in organization structure from a clerically-based function to a strategically focused process. Here we define decision making in a broad sense, relating to the full range of potential activities contained within the function, from tactical buying to strategic supply chain management. decision making, or supply management as it has increasingly become known, is now viewed as a mainstream value-adding process that is seen as “strategic” to the organisation's success (Cousins, 2005, pp.403-28). Many authors have argued that competition in the 2000s will be based on firms with the most efficient supply chains (Carter and Ellram, 2003, pp.27-39; Lamming, 1993, pp 111-178). They argue that sustainable competitive advantage comes from the ability of ...