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Social customs at the time of an organization’s birth also determine how it is structured. This has been very important in the history of business. For example, the organizational forms adopted by the first companies in the automobile industry are not the same as the structures being adopted now. Historically production was structured around the assembly line. Some workers always built chassis, which were then sent down the assembly line to other workers, who did such jobs as putting axles and engines onto those chassis. Currently, many automakers are adopting the work-group or team concept in which a group of workers is responsible for more than just one portion of the car. At the time the auto industry began, no one thought about using a group approach to building cars, given that it was not consistent with the existing values about manufacturing.

Once structures become common in an industry, they tend not to change. Certain social structures remain long after they are no longer suited to situations. For example, the railroad industry in the United States developed a structure that became dysfunctional as the engineering technology in the industry advanced. The tendency to stick with industry-specific structures may be changing with the proliferation of mergers and acquisitions and ever more rapid developments in engineering technologies. These developments may lead to the increased homogenization of structure as companies struggle to handle common problems of size. Alternatively, the need for structural change may become apparent more quickly due to technological advancement.

To read more about organizational structure

Eric Raymond

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