Strategy and Structure Follow Technology

Abstract

This study reconfigures part one of Thompson (1967) as a theoretical restatement of Chandler’s (1962) historical evidence. When organizations grow, their growth orientations and strategies emerge from their technical rationality, according to Thompson’s first criteria of technology instrumentality. Regarding instrumentally reasonable/rational organizations, according to his second criteria of economy, organizational structures such as horizontal departmentalization, vertical hierarchies, and multidivisional forms become necessary to minimize coordination costs. In other words, when discussing growth strategies and multidivisional forms, Chandler claimed that “structure follows strategy,” but Thompson rightfully claimed that “strategy and structure follow technology.”

Keywords

• technical core
• technical rationality
• multidivisional forms
• assessment
• structure follows strategy
• japan quality award