The Evolution of Enterprise Organization Designs

  • Jay R. Galbraith
Keywords: Organization design, organization structure, strategy and structure

Abstract

This article extends Alfred Chandler's seminal ideas about strategy and organizational structure, and it predicts the next stage of organizational evolution. Chandler described the evolution of vertical integration and diversification strategies for which the functional and multidivisional structures are appropriate. He also explained how the dominant structure at any point in time is a concatenation or accumulation of all previous strategies and structures. I extend Chandler's ideas by describing how early "structures" became "organizations" (people, rewards, management processes, etc.) and by discussing the more recent strategies of international expansion and customer focus. International expansion leads to organizations of three dimensions: functions, business units, and countries. Customer-focused strategies lead to four-dimensional organizations currently found in global firms such as IBM, Nike, and Procter & Gamble. I argue that the next major dimension along which organizations will evolve is emerging in firms which are experimenting with the use of "Big Data."

Published
2012-08-03
How to Cite
Galbraith, J. (2012). The Evolution of Enterprise Organization Designs. Journal of Organization Design, 1(2), 1-13. https://doi.org/10.7146/jod.6342
Section
Research Article