The mechanistic model is characterized by centralization and extensive departmentalization. An organic model is a structure that is flat, uses cross-functional teams and participative decision making. Why are some organizations structured along more mechanistic lines whereas others follow organic characteristics?

Structure is a means to achieve objectives derived from the organization’s overall strategy. If management significantly changes the organization’s strategy or its values, the structure must change to accommodate. An organization pursuing a cost-minimization strategy controls costs tightly, refrains from incurring unnecessary expenses, and cuts prices in selling a basic product. Organizations following an imitation strategy try to minimize risk and maximize opportunity for profit, moving new products or entering new markets only after innovators have proven their viability.

An organization’s size significantly affects its structure. Organizations that employ 2,000 or more people tend to have more specialization, more vertical levels, and more rules and regulations than do small organizations. An organization’s environment includes outside institutions or forces that can affect its structure, such as suppliers, customers, competitors, and public pressure groups. Dynamic environments create significantly more uncertainty for managers than do static ones. To minimize uncertainty in key market arenas, managers may broaden their structure to sense and respond to threats.