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."

Managing tolerance stack-up through process integration team in steel industry

“…It can be understood that organizational structures change depends on how the steel manufacturer regards the manufacturing technology of high-grade products, for example, whether the steel manufacturer considers it to involve adjusting the tolerances. It can be said that organizational structure and strategy depend heavily on technology and its recognition (Takahashi, 2016).…”

Where lies an organization's purposiveness?

“…An example of this phenomenon is the anecdote about the three 4 Thompson (1967) discussed a multidivisional type of organization from the standpoint of organizational rationality embedded with this core technology. Chandler (1962) advocated that "structure follows strategy" after analyzing the history of management to see how this multidivisional types came into being, but perhaps what Thompson wanted to say was that for the time being, "strategy and structure follow technology" (Takahashi, 2016).…”