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The Impact of Market Competition on Organization Structure and Effectiveness: A Cross-Cultural Study

Jack L. Simonetti, F. Glenn Boseman

Academy of Management Journal · 1975 · Volume 18 · Issue 3

DOI: 10.5465/255693

Abstract

This article presents information on a study which analyzes the impact of market competition on organization structure and effectiveness. The contingency theory of organizations has lead us to find a decentralized structure of authority to be more appropriate for dynamic environments, whereas organizations operating in stable environments tend to adopt a centralized structure of authority. The contingency theory of organizations has been tested within the context of a developing country, exploring the impact of decentralization on the organizational effectiveness of firms operating under varying conditions of market competition.

Keywords

COMPETITION, MARKETS, CROSS-cultural studies, ORGANIZATION, BUSINESS enterprises, MANAGEMENT, ORGANIZATIONAL effectiveness, CONTINGENCY theory (Management), AUTHORITY, DECENTRALIZATION in management, ORGANIZATIONAL structure, EMERGING markets

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