This research examines the relationship between total quality management (TQM) and organizational structure. TQM is an organizational system that requires the involvement of every facet of a company's operation and every company employee in the effort to promote high product quality. TQM, therefore, tends to produce incremental quality gains, as opposed to dramatic, one shot improvements. Decentralization is essential in a TQM system, and refers to the movement of the organizational decision making processes downward within the organizational structure. the process of decentralization causes TQM to affect organizational structure.
Two primary classifications of organizational structure are mechanistic and organic. The differences between mechanistic and organic organizational structures are expressed in the context of the level of formal structure and control embodied in the two organizational concepts. The character of an organization's internal structure is often related to the external environment within which it functions. Organizations functioning within a stable external environment typically have formal internal organizational structures with clearly established and observed operating procedures and rules, and a well defined hierarchy of authority. Within such organizations, decision making is typically top down in character. This type of organizational structure is mechanistic in character. Organizations functioning within a dynamic external environment frequently are chaotic in character defined as "much looser, free flowing, and adaptive. Rules and regulations are not written down, or if written down are frequently ignored. People have to find their own way through the system to figure out what to do. The hierarchy of authority is not clear. Decision making authority is decentralized. Such internal organizational structures are organic in character.
Daft held that the organic organizational structure is ...