Organizational forms have evolved over the decades. Organizational design reflects the systems view, which considers that structure consists of both hard and soft components, and is the superior composition of relationship between organizational elements. Structural dimensions are traditionally examined along three dimensions of formal relationship: hierarchical, functional, and the dimension of inclusion and centrality, underlining two prime types of structure: mechanistic and organic organizations. However, the knowledge economy makes new demands on organizational structuring based on processes. Informal structure better depicts actual organizational activities and reflects dynamic interaction that is critical to knowledge creation. This conceptual paper incorporates informal structure as an important dimension and further elaborates organizational structuring at a higher level: trust-based relationship, externally-oriented interactive relationship, and emotionally-inclusive relationship; and their importance in the attainment of organizational success in the knowledge economy.
- Knowledge management
- Organizational structure