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Annals of Business Administrative Science
Vol. 15 (2016) No. 1 p. 15-27

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http://doi.org/10.7880/abas.0150810a


This study reconfigures part one of Thompson (1967) as a theoretical restatement of Chandler's (1962) historical evidence. When organizations grow, their growth orientations and strategies emerge from their technical rationality, according to Thompson's first criteria of technology instrumentality. Regarding instrumentally reasonable/rational organizations, according to his second criteria of economy, organizational structures such as horizontal departmentalization, vertical hierarchies, and multidivisional forms become necessary to minimize coordination costs. In other words, when discussing growth strategies and multidivisional forms, Chandler claimed that “structure follows strategy,” but Thompson rightfully claimed that “strategy and structure follow technology.”

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