Organizational Structure, Culture, and Knowledge Dynamics

Introduction

The nature and dynamics of organizations today are shaped by various factors, often implicitly manifested rather than explicitly shown. Both an organization's nature and dynamics provide it a distinct identity from other organizations. A review of extant literature on organizational studies highlights the importance of structure, culture, and knowledge base as critical factors contributing to organizational identity and dynamics. This paper reviews three journal articles on organizational studies, centering on these three critical factors — structure, culture, and knowledge base — and concludes with an assertion of how they describe and characterize the nature and dynamics of most organizations today.

Knowledge Base and Organizational Structure

Ozman's (2010) study centered on the relationship between the formation of an organization's structure and its knowledge base of products. This relationship was established to demonstrate that contemporary organizations have increasingly become dependent on, and defined by, the kind of knowledge they possess and utilize for growth. Ozman identified that organizations are characteristically defined based on the breadth and depth of their knowledge base. Knowledge breadth looks at the complexity of products that the organization has and measures this complexity's expansion to "different competences." Knowledge depth, meanwhile, is best defined by "economies of scope" and measures how identified competences in the organization's knowledge base can be used and applied to different kinds of products (pp. 1135–6).

Both knowledge breadth and depth contribute to organizational structure because organizations depend on the nature of their knowledge and products when developing the business or organizational model that best fits them. Business organizations, for example, either become generalist or specialist organizations depending on the knowledge they have and the kinds of products they produce. An organization is more diversified when there is a high level of knowledge applied across different kinds of products. This makes the organizational structure shallow but more expanded — descriptive of business organizations in manufacturing (p. 1142). On the opposite end of the spectrum, an organization's structure is considered highly defined when there is a "narrow knowledge base," wherein knowledge is applied only to one product and product diversity is low. This is characteristic of specialist industries and organizations such as service and specialty shops (pp. 1139–1141).

Psychological Contracts and Organizational Culture

Another dimension of the knowledge base is explored in Thomas et al.'s (2010) study of "psychological contracts" and how they determine the cultures and sub-cultures that emerge in organizations across different countries. The researchers defined psychological contracts as "individual beliefs or perceptions concerning the terms of the relationship between the individual and the organization," and identified the following dimensions: (1) vertical or horizontal, referring to social status and power in "exchange relationships," and (2) individualism and collectivism, reflecting people's self-concept based on their own and others' perceptions (p. 1440).

Results of the study showed that different countries manifested different kinds of psychological contracts among their employees. The Chinese tend to be more "custodial" in their approach, best described as vertical-collectivist — a highly cooperative relationship that also places high regard on social status. The French display an "exploitive" employer-employee relationship (vertical-individualist), Canadians an "instrumental" one (horizontal-individualist), and the Norwegians a "communitarian" one (horizontal-collectivist) (p. 1442). The study demonstrated the role that cultural knowledge plays in determining the best organizational strategy and structure that an organization should adopt given its identity and character.

Conclusion

The studies by Ozman, Thomas et al., and Fiedler and Welpe have demonstrated the role that knowledge and information play in shaping the culture and structure of contemporary organizations. In an information-driven society, organizations are increasingly dependent on their knowledge base to ensure continuous growth and to maintain their competencies relative to other organizations. While other variables and factors also contribute to shaping organizational culture and structure, these articles reinforce and emphasize the idea that current organizational realities highlight the criticality of the knowledge base in the very existence and functioning of organizations today.