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KIRLOSKAR INSTITUTE OF ADVANCED MANAGEMENT

STUDIES, PUNE

Organizational Structure

Process And Design

ARTICLE PRESENTATION

Presented To:

Dr. Janaki Naik

Presented by:

Apoorva Kulshreshtha

Neeraj Bhandari

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DECREASING

ORGANIZATIONAL SIZE: TOUNTANGLE OR NOT TO

UNTANGLE?

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Background

This article contradicts an article published inthe previous issue whose author wereSutton and DAunno.

They outlined the result that decliningfinancial resources and a decreasingworkforce has same effect on organizationstructure.

The author focuses on the main point ofcontention i.e. falsity of two mainassumptions made in the previous article.

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First Model

Decrease In financial resources

Increase in the mechanistic nature of

organization ( standard operating procedures,

greater job standardization, centralization ofauthority and decreased job autonomy)

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Second Model

Decrease in workforce size

Increase in mechanistic

nature of organization

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Contention

The last model is valid only in short run

not in long run.

Financial resources decline andpersonnel decline have different effects

on organizational structure and thus

these effects can be untangled.

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Assumptions

Structural change is symmetricalduring organizational growth and

decline Work force decline reduces

coordination and control needs.

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Assumption1: Symmetry between

growth and decline in structure

If growth increases needs for coordination andcontrol and leads to more formalized structures

than decline must have the opposite effect.

Because work force decline entails size changes

that are the opposite of those occurring during

growth, the assumption is that structural change

will also follow a reverse path, and the long-term

outcome of work force reduction will be a lessmechanistic structure.

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Reversing the direction of an independentvariable, such as organizational growth, may

or may not produce a reversal in a

dependent variable connected with it. Downs pointed out that a decline in a

bureaucracy's volume of work is rarely

accompanied by a proportional decrease inthe control structure or the number of

administrators.

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Assumption 2

According to Sutton and D'Aunno's

This was the assumption that work force

decline reduces needs for coordination

and control.

Sutton and D'Aunno view the level of

work force size as critical.

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Contradiction

According to past research reasons why

work force decline may not reduce

coordination and control but may,

infact,increase them .

Author give three reasons for that on the

basis of experience.

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First Reason

According to author first reasonmost decreases in work force size, or

"downsizings, take place through

layoffs.

To justify their view he gave some

examples from past research and

case studies.

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Third Reason

Third reason why work force reductionmay explain coordination needs has to

do with inter organizational linkages.

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To Untangle Or Not To Untangle ?

Many changes arising from long-termwork force reduction may be in the

direction of more mechanistic, rather

than less mechanistic, organizationalstructures.

Effects of work force reduction and

reduction in financial resources are

different and can be untangled.

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Discussion and Conclusion

The points made in this comment have

several implications for future theory and

research on the process of organizationaldecline which are enumerated below:

First decline of current model

Second complexity of the organizationaldecline process.

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