Application of Information Processing Theory on the inter-relationship of organizational culture and organizational structure

Abstract

A conceptual model of the inter-relationship between organizational culture and organizational structure has been formulated. However, it is still unable to explain the direction of interaction of organizational culture and organizational structure in real day-to-day operation. This paper explains this relationship through the application of Information-Processing Theory. It has been established that, on one hand, organizational structure modifies organizational culture and, on the other hand, organizational culture determines organizational structure. Based on the Information-Processing Theory, it is hypothesized that a good fit between organizational structure and organizational culture, has a positive relationship with the effectiveness of the organization. This model is illustrated by an empirical study of the Facilities Management Unit (FMU) of a public health care institution. The information-processing requirements of organizational culture and information-processing capacities of organizational structure of FMU are measured through a questionnaire adopted from the Competing Values Model and a self-administered questionnaire respectively. Preliminary results show that the information-processing requirement of the FMU is high as the organizational culture is dominated by clan. However, the information-processing capacity of the FMU is low as the organizational structure is highly formalized and centralized while the level of integration is only medium. The organizational culture of the FMU is not fitted by its organizational structure.