“Organizational design often focuses on structural alternatives such as matrix, decentralization, and divisionalization. However, control variables (e. g., reward structures, task characteristics, and information systems) offer a more flexible approach. The purpose of this paper is to explore these control variables for organizational design. This is accomplished by integration and testing of two perspectives, organization theory and economics, notably agency theory. The resulting hypotheses link task characteristics, information systems, and business uncertainty to behavior vs. outcome based control strategy. These hypothesized linkages are examined empirically in a field study of the compensation practices for retail salespeople in 54 stores. The findings are that task programmability is strongly related to the choice of compensation package. The amount of behavioral measurement, the cost of measuring outcomes, and the uncertainty of the business also affect compensation. The findings have management implications for the design of compensation and reward packages, performance evaluation systems, and control systems, in general. Such systems should explicitly consider the task, the information system in place to measure performance, and the riskiness of the business. More programmed tasks require behavior based controls while less programmed tasks require more elaborate information systems or outcome based controls.”

Source: "Control: Organizational and economic approaches," 1985, p. 134; Article abstract

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Kathleen M. Eisenhardt4

American economist

Charles Perrow (1925–2019) American sociologist

Source: 1970s, Organizational Analysis: A Sociological View, 1970, p. 52

“Agency theory is an important, yet controversial, theory. This paper reviews agency theory, its contributions to organization theory, and the extant empirical work and develops testable propositions. The conclusions are that agency theory (a) offers unique insight into information systems, outcome uncertainty, incentives, and risk and (b) is an empirically valid perspective, particularly when coupled with complementary perspectives. The principal recommendation is to incorporate an agency perspective in studies of the many problems having a cooperative structure.”

Kathleen M. Eisenhardt American economist

Source: "Agency theory: An assessment and review," 1989, p. 57 Abstract

“Concepts of uncertainty and information processing are used to integrate the diverse organization design/structure literatures. This approach more fully explicates the concept of congruence which lies at the heart of contingency ideas. The review suggests a contingency approach to design which develops a feasible set of structural alternatives from which the organization can choose.”

David A. Nadler (1948–2015) American organizational theorist

Source: "Information Processing as an Integrating Concept in Organizational Design." 1978, p. 613: Abstract

“Organizational design is the body of knowledge and techniques that seeks to offer useful advice to organizations about their structures (and other aspects) needed to attain their goals.”

Richard M. Burton (1939)

Richard M. Burton, ‎Bo Eriksen, ‎Dorthe Døjbak Håkonsson (2008). Designing Organizations: 21st Century Approaches. p. 5

“Contingency theory states that there is no single organizational structure that is highly effective for all organizations.”

Lex Donaldson (1947) British-Australian organizational sociologist

Lex Donaldson, "The normal science of structural contingency theory." Studying Organizations: Theory and Method. Thousand Oaks, Calif: Sage (1999): 51-70.
Context: Within organization studies, contingency theory has provided a coherent paradigm for the analysis of the structure of organizations. The paradigm has constituted a framework in which research progressed leading to the construction of a scientific body of knowledge... Contingency theory states that there is no single organizational structure that is highly effective for all organizations. It sees the structure that is optimal as varying according to certain factors such as organizational strategy or size. Thus the optimal structure is contingent upon these factors which are termed the contingency factors. For example, a small-sized organization, one that has few employees, is optimally structured by a centralized structure in which decision-making authority is concentrated at the top of the hierarchy, whereas a large organization, one that has many employees, is optimally structured by a decentralized structure in which decision-making authority is dispersed down to lower levels of the hierarchy.

“The management system of an organization must have compatible component parts if it is to function effectively. This conclusion has a very important implication; experiments in organizations must involve internally consistent changes. The traditional atomistic research design is not appropriate for experiments involving organizational theory or management systems. Every aspect of a management system is related to every other part and interacts with it.
The results obtained by altering a single variable or procedure while keeping all others the same usually will yield quite different results from those obtained when that variable is changed along with simultaneous and compatible changes in all other aspects of the management system. The true influence of altering one aspect of the system cannot be determined by varying it and it alone… In experiments involving organizational theory and management systems, therefore, a systems approach must be used. The organic integrity of each system must be maintained while experimental variations are being made.”

Rensis Likert (1903–1981) American statistician

Source: The Human Organization, 1967, p. 123

“Recent organizational approaches to control (e. g., Ouchi 1979) suggest two underlying control strategies. On the one hand, control can be accomplished through performance evaluation. Performance evaluation refers to the cybernetic process of monitoring and rewarding performance. This strategy emphasizes the information aspects of control. Namely, to what degree can the various aspects of performance be assessed? Alternatively, control can be achieved by minimizing the divergence of preferences among organizational members. That is, members cooperate in the achievement of organizational goals because the members understand and have internalized these goals. This strategy emphasizes people policies such as selection, training, and socialization.
The two control strategies are interrelated. An organization can tolerate a work force with highly diverse goals if a precise evaluation system exists. In contrast, a lack of precision in performance evaluation can be tolerated when goal incompatibility is minor (Ouchi 1979). The choice between the two is driven by the ease of performance evaluation”

Kathleen M. Eisenhardt American economist

Source: "Control: Organizational and economic approaches," 1985, p. 135

“This paper develops a new theoretical model with which to examine the interaction between technology and organizations. Early research studies assumed technology to be an objective, external force that would have deterministic impacts on organizational properties such as structure. Later researchers focused on the human aspect of technology, seeing it as the outcome of strategic choice and social action. This paper suggests that either view is incomplete, and proposes a reconceptualization of technology that takes both perspectives into account. A theoretical model-- the structurational model of technology--is built on the basis of this new conceptualization, and its workings explored through discussion of a field study of information technology. The paper suggests that the reformulation of the technology concept and the structurational model of technology allow a deeper and more dialectical understanding of the interaction between technology and organizations. This understanding provides insight into the limits and opportunities of human choice, technology development and use, and organizational design. Implications for future research of the new concept of technology and structurational model of technology are discussed.”

Wanda Orlikowski American computer scientist

Source: "The duality of technology" 1992, p. 389; Abstract

“Contingency theories dominate scholarly studies of organization behavior, design, performance, planning and management strategy. While they vary widely in subject matter, they have the common proposition that an organizational outcome is the consequency of a "fit" or match between two or more factors. "Fit" is the key concept in this proposition, and the core problem common to contingency theories is not defining this term clearly. This paper examines three ways to define and test this concept of fit: Selection, Interaction, and Systems approaches. A critical discussion of these three approaches will clarify much of the current confusion in the literature on contingency theories, and suggest ways that future theorizing and research can become more systematic and constructive.”

Andrew H. Van de Ven (1945) American business theorist

Andrew H. Van de Ven and Robert Drazin (1984). The Concept of Fit in Contingency Theory http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA152603. No. SMRC-DP-19). Minneapolis: Minnesota University Minneapolis Strategic Management Research Center.

“For many purposes of organizational analysis technology might not be an independent variable but a dependent one.”

Charles Perrow (1925–2019) American sociologist

Charles Perrow (1967), in: Industrial Relations Research Association, Proceedings of the ... Annual Winter Meeting, Vol. 19 (1967), p. 163
1960s

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Kathleen M. Eisenhardt4

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