# Organizing and Structure

Business I · Business Administration · https://tryals.app/learn/business-i/organizing-and-structure

## The Architecture of Strategy

Organizing turns a strategy into an architecture. Six dials define any structure.

**Division of labor** splits work into specialized jobs. **Departmentalization** groups jobs by function, product, geography, customer, or in a **matrix** combining function and project.

| Dial | The choice |
|---|---|
| Chain of command | Line of authority (unity of command) |
| Span of control | Workers per manager (narrow vs wide) |
| Centralization | Where decisions live |
| Formalization | Rules and procedures |

Narrow spans mean close supervision and **tall** structures. Wide spans mean autonomy and **flat** ones. Hierarchy layers approximate $\text{layers} \approx \log_s N$ with span $s$ and workers $N$.

> **Example:** With span 4, 4,096 workers need 6 layers; widen to 8 and only 4 layers remain.

## Master Profiles & Friction

**Two master profiles** bundle the dials. The **mechanistic** organization is tall, centralized, formalized, and thrives in stable environments. The **organic** organization is flat, decentralized, informal, and thrives in turbulent ones.

**Line roles** sit on the value chain and command. **Staff roles** like legal and HR advise it. Chronic friction between them is structural, not personal.

| Profile | Traits | Environment |
|---|---|---|
| Mechanistic | Tall, formal, function-based | Stable |
| Organic | Flat, informal, team-based | Turbulent |

> **Common pitfall:** Calling the matrix's two bosses a flaw. The matrix _deliberately_ breaks unity of command to force collaboration; failure stems from unarbitrated conflicts.

## Practice questions

7 of this lesson's 13 practice questions, with answers. The full set is in the app.

### 1. A company has 729 front-line workers and uniform span of control 9 at every level. Compute how many management layers sit above the front line ($\log_9 729$).

**Answer:** 3 (within ±0.1)

**Why:** $9^3 = 729$: three layers, 81 team leads, 9 managers, 1 director. Change the span to 3 and the same workforce needs six layers; the exponent is the whole delayering debate.

Page: https://tryals.app/practice/business-i/organizing-and-structure/a-company-has-729-front-line-workers-and-uniform-span-of-control-9-at

### 2. A mechanistic structure outperforms an organic one when the environment is stable and the work well understood.

**Answer:** True

**Why:** True. Where the task is known and unchanging, standardisation and clear hierarchy are efficient and cheap to coordinate. Organic structures earn their overhead only when the environment shifts faster than procedures can be rewritten, which is why 'flatten the org chart' is advice, not a law.

Page: https://tryals.app/practice/business-i/organizing-and-structure/a-mechanistic-structure-outperforms-an-organic-one-when-the

### 3. Match each structural dial to the question it answers.

**Answer:**

- Span of control → How many report to each manager?
- Centralization → Where do decisions live?
- Formalization → How much is written into rules?
- Chain of command → Who answers to whom?

**Why:** Four dials, one machine: every org chart is a setting of these knobs, whether anyone chose it deliberately or not.

Page: https://tryals.app/practice/business-i/organizing-and-structure/match-each-structural-dial-to-the-question-it-answers

### 4. A game studio in a fast-shifting market adopts tall hierarchy, thick rulebooks, and top-only decisions, and starts missing every trend. Burns and Stalker’s diagnosis?

A. Correct design, wrong employees
B. An organic design mismatched to a stable environment
C. Too little formalization
D. A mechanistic design, wrong environment

**Answer:** D. A mechanistic design, wrong environment

**Why:** Mechanistic machinery is superb at repeating yesterday efficiently, fatal when tomorrow keeps changing. The same design running a power plant would be praised; contingency theory grades structures only against their environments.

Page: https://tryals.app/practice/business-i/organizing-and-structure/a-game-studio-in-a-fast-shifting-market-adopts-tall-hierarchy-thick

### 5. A stable utility and a fast-moving game studio adopt opposite structures and both perform well. Which claim does that support?

A. That structure has no measurable effect on performance
B. That both firms would perform better still with a hybrid structure
C. Contingency theory: fit determines performance
D. That flat structures work only in small organisations

**Answer:** C. Contingency theory: fit determines performance

**Why:** Mechanistic structures suit stable, predictable environments and organic ones suit turbulence, so the right question is *fit* rather than *best*. Burns and Stalker established this in the 1960s, and it is why importing a competitor's org chart without importing their environment usually fails.

Page: https://tryals.app/practice/business-i/organizing-and-structure/a-stable-utility-and-a-fast-moving-game-studio-adopt-opposite

### 6. Which are predictable costs of a matrix structure?

A. Loss of all functional expertise
B. Ambiguity over who evaluates performance
C. Employees negotiating conflicting demands from two bosses
D. Slower decisions when the two chains disagree

**Answer:** B. Ambiguity over who evaluates performance; C. Employees negotiating conflicting demands from two bosses; D. Slower decisions when the two chains disagree

**Why:** The matrix breaks unity of command *on purpose* and pays in conflict, negotiation time, and appraisal ambiguity. Functional expertise is what it keeps, that retention is the whole reason to pay the other costs.

Page: https://tryals.app/practice/business-i/organizing-and-structure/which-are-predictable-costs-of-a-matrix-structure

### 7. Line roles hold command authority and staff roles advise. Why is friction between them treated as structural rather than as a personnel problem?

A. Because staff own expertise and line own results
B. Because line managers resist advice as a matter of temperament
C. Because staff roles are usually filled by less experienced managers
D. Because the distinction is obsolete in modern organisations

**Answer:** A. Because staff own expertise and line own results

**Why:** Two legitimate authorities over the same decision produce predictable conflict. Recognising it as structural is what makes it manageable rather than personal.

Page: https://tryals.app/practice/business-i/organizing-and-structure/line-roles-hold-command-authority-and-staff-roles-advise-why-is