Beyond Structural Contingency: Towards a Methodological Extension to the Assessment of "Fit"

With the advent of the widely heralded "new economy", organizations are undergoing profound changes. The traditional vertically integrated business units seem to serve as the springboard to launch the new organizational forms (e.g., virtual organization, network organization). The basic tenets of the organizational form, viz., strategy, structure and context, have gained renewed vigor as building blocks for the new organizational forms. Structural contingency has served as the foundation concept for organizational design for a long time. This paper offers a methodological path to extend the concept of 'fit' where multiple, possibly confl ict ing contingencies and structural alternatives are holistically examined. The solution is illustrated by: (1) examining the multivariate fit between four context variables and five structure dimensions; and then (2) testing the impact of the derived configurations on performance. The source of data for this illustration of methodological extension to the assessment of 'fit' is Umanath & Kim (1992). A pair of operational configurations depicting theorized formulations of organizational designs is derived; this pair can serve as the 'ideal profiles' in the assessment of target configurations. Since several target configurations may qualify as equally effective, this methodology supports the concept of equifinality in organizational design solutions.