Directional interaction of organizational culture and structure through information processing theory

Abstract

A new theoretical model has been developed to explain the interaction of organizational culture and organizational structure, which, together, influence the effectiveness of the organization under a Stimulus-Organism-Response paradigm. It is found that through a loop of 'People-Behaviour-Performance- Organizational Structure-People', culture affects the organizational structure and through another 'Goals-Organizational Structure-Output- Organizational Culture-Gaols' loop, the structure of an organization modifies the organizational culture. Furthermore, with the support of Information Processing Theory, it is able to explain the direction of the interaction of organizational culture and organizational structure. It is found that if the information-processing requirement of an organization dominated by a specific culture fits the information-processing capacity of a particular structure of the organization, the effectiveness of the organization increases. The model is applied in a case study of public healthcare institution. This paper presents both the model and its analysis in application.