Structure, Strategy and Performance

Abstract

The allocation and distribution of the authority to make decisions is a critical task of organizational design in the public and private sector. Classical theorists of bureaucracy regarded the relative degree to which decision-making is centralized as integral to understanding how managerial choices are conducive to greater organizational efficiency (Gulick and Urwick, 1937; Weber, 1947). Contingency theory suggests that the extent of centralization within an organization should be dependent upon other key characteristics, especially the strategy content of an organization. In this chapter, we conceptualize centralization in organizations; survey the existing quantitative evidence on the centralization-performance relationship in public organizations; and theorize and empirically assess the separate and combined effects of centralization and strategy on public service performance.