Content area
Full Text
Abstract Organizational forms have evolved over the decades. Organizational design reflects the systems view, which considers that structure consists of both hard and soft components, and is the superior composition of relationship between organizational elements. Structural dimensions are traditionally examined along three dimensions of formal relationship: hierarchical, functional, and the dimension of inclusion and central, underlining two prime types of structure: mechanistic and organic organizations. However, the knowledge economy makes new demands on organizational structuring based on processes. Informal structure better depicts actual organizational activities and reflects dynamic interaction that is critical to knowledge creation. This conceptual paper incorporates informal structure as an important dimension and further elaborates organizational structuring at a higher level: trust-based relationship, externally-oriented interactive relationship, and emotionally-inclusive relationship; and their importance in the attainment of organizational success in the knowledge economy.
Keywords Organizational structure, Systems, Knowledge management
Introduction
The paradigm of management has evolved through several distinct stages. Central in this evolution has been the shift in organizational structure. Organizational structure is a primary driver of change since it provides the skeletal structure for all organizational decisions and processes. Authors have categorized the shift of organizational structure in various ways. For instance, Burns and Stalker (1961) classify two types of organizations: mechanistic and organic structure. At a broader level, numerous authors have postulated a shift along a perspective that views organizations as machines, organisms and processes (Scott, 1981; Tsoukas, 1994), etc.
Previous studies on organizational structure have established a three-dimensional framework characterizing different types of structure. For instance, Schein (1988) defines structure in terms of hierarchical dimension, functional dimension, and inclusion and centrality dimension. However, Schein's framework primarily explains formal structure in the organization, and does not reveal the subtle energy that flows behind the organizational chart. This "hidden energy" is commonly referred to as "informal structure" or "informal relationship"; and this energy plays a conspicuous role in many new forms of process-based organizations, such as network or knowledgebased organizations. This paper first incorporates informal structure as a fourth dimension to depict structural evolution and further elaborates structural development at a higher level: trust-based relationship, external ly-oriented interactive relationship, and emotionally-inclusive relationship. These higher levels of structural relationships are able to more clearly depict the structural challenges in the era...