Guiding principles of modern organizations and the term “structure” that we use today frequently to explain features of organizations are the studies of Max Weber.

Max Weber had focused on developing an ideal form of organizing business in state institutions that may help to isolate these organizations from corruption – recruitment and promotion decisions were based on relations of a candidate with the German Dynasty. Weber named this ideal type of organization as “bureaucracy”.

Weber was criticized because of designing an iron cage for the employees, which, decreases creativity, increases dissatisfaction and demotivation.

Social structure refers to formal interaction and communication patterns ; hierarchical relations; organization of departments and units ; written rules, instructions and procedures.

Formalization refers to the number of written documents comprising procedures, job descriptions, regulations, instructions and guidelines.

Too much red tape : is an idiom, which has been frequently used to denote unnecessary paperwork in organizations.

Hierarchy of authority refers to the number of managerial levels in an organization, and it is closely related to span of control – the number of employees reporting to a supervisor.

Centralization refers to the direction –top or lower level- of decisions in organizational hierarchy.

Top-managers transfer their authorities to lower-levels in decentralized organizations to create a flexible work environment where people can actively involve in decision-making.

Specialization refers to the degree to which organizational tasks or work processes are subdivided into separate jobs.

Horizontal complexity is a specific term explaining the number of departments in organizations.

Contextual variables are size, environment, technology, culture and strategy.

Vertical design aims at increasing control over employees and work processes in organizations.

Horizontal design approach gives priority to increase collaboration and information sharing among organizational units.

Organic design if best for rapid changes.

Mechanistic design is best when stable.

Creativity, innovation and learning became more important in case of rapid changes in the external environment.

Small batch and unit production : Some firms produce customized small orders of a specific customer group. Production of these goods requires human craft and it cannot be mechanized.

Large batch and mass production : Manufacturing process is based on job simplification and standardization. It progresses through fulfillment of predefined and sequential pieces of tasks.

Continuous process production : There is no direct human involvement to the manufacturing process. All steps of the production are mechanized and they consist of numerous chemical steps. There is no start or stop, manufacturing proceeds in a cyclical manner.