DSpace at Khazar University

The Diversified Organization
Like the professional organization, the diversified one is not so much an
integrated organization as a set of rather independent entities coupled together by a
loose administrative structure. But whereas those entities of the professional
organization are individuals, in the diversified one they are units in the middle line,
generally called 'divisions', exerting a dominant pull to Balkanize. This configuration
differs from the others in one major respect: it is not a complete structure, but a partial
one superimposed on the others. Each division has its own structure.
An organization divisional zed for one reason above all, because its product lines
are diversified. And that tends to happen most often in the largest and most mature
organizations, the ones that have run out of opportunities – or have become bored – in
their traditional markets. Such diversification encourages the organization to replace
functional by market – based units, one for each distinct product line, and to grant
considerable autonomy to each to run its own business. The result is a limited form of
decentralization down the chain of command.
How does the central headquarters maintain a semblance of control over the
divisions? Some direction supervision is used. But too much of that interferes with the
necessary divisional autonomy. So the headquarters relies on performance control
system, in other words, the standardization of outputs. To design these control across
from the small central support staff that headquarters sets up to provide certain services
common to the divisions such as legal counsel and public relations and because
headquarters' control, as discussed in the first hypothesis on power, the structure of the
divisions tend to be drawn towards the machine form.
The Innovative Organization
None of the structures so far discussed suits the industries of our age, industries
such as aerospace, petrochemicals, think tank consulting and film-making. These
organizations need above all to innovate in very complex ways. The bureaucratic
structures are too inflexible, and the entrepreneurial one too centralized. These
industries require 'project structures', ones that can fuse experts drawn from different
specialties into smoothly functioning creative teams. That is the role of our fifth
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