Jerald Hage and Michael Aiken

Relationship of Centralization toOther Structural Properties

This paper examines two different ways of measuring the distributionof power in sixteen health and welfare orginazations. Participation indecision making about the\a,llocation of organizational resources andthe determination of organizational policy was strongly related to thedegree of complexity as measured by (1) the number of occupationalspecialities, (2) the amount of professional training, and (3) the amountof professional activity and was weakly related to the degree of formali-zation as measured by the degree of job codification and the amountof rule observation. Except for rule observation, hierarchy of au-thority or the reliance on the chain of command for work decisionswas not as strongly related to each of these measures of organizationalstructure. A partial correlational analysis between each measure ofthe distribution of power and the five structural properties indicatesthat participation in decision making retains an association with thefirst two indicators of complexity and ihe first indicator of formaliza-tion even when the other five variables are controlled simultaneously.The hierarchy of authority retains an association with the amount ofprofessional activity and the amount of rule observation. At the sametime, it is important to recognize that these two measures of the dis-tribution of power are themselves strongly interrelated. When de-cisions about the allocation of organizational resources are centralized,then there is a centralization of work decisions as well.

Professors Hage and Aiken are assistant professors of sociology atthe University of Wisconsin.

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

STRUCTURAL PROPERTIES /jgRECENTLY Crozier has suggested that the key to organizationalanalysis is the study of the distribution of power.^ Tannenbaumand Massarik, and Worthy, have pointed out how important theallocation of power is in an organization, and have suggested thatone implication of a decentralized power structure for organiza-tions is higher morale.^ In his discussion of bureaucracy, Webersuggested that a strict hierarchy of authority, here considered asone aspect of centralization, leads to greater efficiency.* Weberappears to have focussed on the decisions involving work, whereasWorthy, and Tannenbaum and Massarik have focussed on par-ticipation in decision making about the allocation of organiza-tional resources, a distinction made by Pugh and his associates intheir discussion of centralization.* Both views consider the rela-tionship between the distribution of power in an organization,i.e., the degree to which power is centralized, and its impact uponparticular organizational performances such as morale and effi-ciency. One can also raise the question of what impact centraliza-tion has on the social structure of an organization other than itspower distribution.

The purpose of this paper is to explore the relationship betweencentralization of power and what we feel are two critical aspectsof an organization's social structurethe degree of formalizationand the degree of complexity.'* The former variable representsthe relative emphasis on the use of rules, the "red tape of bureauc-racy," while the latter variable represents tbe relative emphasis

^ Michel Crozier, The Bureaucratic Phenomenon (Stanford: Stanford University,1963).

2 James C. Worthy, Organizational Structure and Employee Morale, AmericanSociological Review, 15 (April 1950), 169-179; Robert Tannenbaum and FredMassarik, Participation by Subordinates in the Managerial Decision-Making Process,The Canadian Journal of Economics and Political Science 16 (1950), 408^18.

8 Max Weber, The Theory of Social and Economic Oragnizations, L. Hendersonand T. Parsons (trans.), (Glencoe, 111. The Free Press, 1947), pp. 324-340.

*D. S. Pugh et al., A Conceptual Scheme for Organizational Analysis, Admin-istrative Science Quarterly, 8 (December 1963), 289-315.

" There are relatively few comparative studies of organizations that presentempirical data. The two most relevant to this study are: Richard H. Hall, TheConcept of Bureaucracy: An Empirical Assessment, American Journal of Sociology,69 (July 1963), 32-40; and Peter M. Blau, Wolf V. Heydebrand, and Robert E.Stauffer, The Structure of Small Bureaucracies, American Sociological Review, 31(April 1966), 179-192.

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

74 ADMINISTRATIVE SCIENCE QUARTERLY

on the use of occupational skills and training, the professionalorientation of an organization. The key theoretical question iswhether centralization of power tends to be associated with highformalization and low complexity as has been suggested in a re-cently published theory of organizations.* In answering this ques-tion, another relevant issue is raisedhow best to measure the dis-tribution of power. In exploring the relationship between cen-tralization, formalization, and complexity, two measures of powerare compared. The first indicator of centralization is a measureof the power to make work decisions, which we call hierarchy ofauthority. Our focus is then on how does the power distributionas measured by either the power to make policy decisions or thepower to make work decisions affect the formalization and thecomplexity of an organization's social structure. Since all thedata on this study are cross-sectional statements, we cannot infercausality but are limited to saying that there appears to be anassociation or interrelationship between these basic dimensionsof organizational structure.

The conceptualization and measurement of each of the struc-tural characteristics of the organizations in our study along withthe research design is discussed in the first section of this paper.Formalization is indicated by two measuresjob codification andrule observation; while complexity is indicated by three mea-suresnumber of occupational specialities, degree of professionaltraining, and amount of professional activity. The findings andthe rationales for the hypothesized relationships between cen-tralization and these properties are discussed in the second sec-tion. The relationship between participation in decision makingand these five indicators is explored first; then, the relationshipbetween hierarchy of authority is explored. Finally, the basichypotheses about centralization, formalization, and complexityare evaluated.

STUDY DESIGN AND METHODOLOGYThe data upon which this study is based were gathered in 16

social welfare and health agencies located in a large midwestern

8 See Jerald Hage, An Axidihatic Theory of Organizations, Administrative ScienceQuarterly 10 (December 1965), 289-321.

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

STRUGTURAL PROPERTIES 175

metropolis in 1964. Ten agencies were private; six were eitherpublic or branches of public agencies. These agencies were allwelfare organizations that provide rehabilitation and psychiatricservices, or services for the mentally retarded (as defined by thedirectory of the community chest). The agencies vary in sizefrom twelve to several hundred full-time staff. Interviews wereconducted with 314 staff members of these 16 organizations.Respondents within each organization were selected by the fol-lowing criteria: all department heads; and one-half of the staffselected randomly in departments of less than ten members; orone-third of the staff selected randomly in departments of morethan ten members. Nonsupervisory administrative and main-tenance personnel were not interviewed.

This sampling procedure divided the organization into levelsand departments. Job occupants in the upper levels were selectedbecause they were most likely to be key decision makers and todetermine organizational policy, whereas job occupants in thelower levels were selected randomly. The different ratios withindepartments ensured that smaller departments were adequatelyrepresented. Professionals such as psychiatrists, social workers,rehabilitation counselors, and so on, were included because theywere intimately involved in the achievement of organizationalgoals and were likely to have organizational power. Nonprofes-sionals such as attendants, janitors, and secretaries were excludedbecause they were not directly involved in the achievement oforganizational goals and had little or no power. The number ofinterviews varied from seven in the smallest agency to forty-onein one of the larger ones.

Units of AnalysisIt should be stressed that the units of analysis were organiza-

tions, not individuals in the organizations. Information obtainedfrom respondents was pooled to reflect properties of the 16 organi-zations as a unit. These properties were then related to oneanother. Aggregating data in this way presents methodologicalproblems for which there are as yet no satisfactory solutions. Forexample, if all respondents are equally weighted, undue weightis given to respondents lower in the hierarchy; yet those higher in

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

76 ADMINISTRATIVE SCIENCE QUARTERLY

the chain of command, not those lower in the chain of command,are most likely to make the decisions that give an agency its ethos.^

We attempted to compensate for this by computing an organi-zational score from the means of jobs or social positions withinthe agency.^ A social position was defined by the level or stratumin the organization and the type of professional activity. For ex-ample, if an agency's professional staff consisted of psychiatristsand social workers, each divided into two hierarchal levels, theagency had four social positions: supervisory psychiatrists, psy-chiatrists, supervisory social workers, and social workers. A meanwas then computed for each social position in the agency. Theorganizational score for a given variable was determined by com-puting the average of all social position means in the agency. Thisprocedure for computing organizational scores paralleled the

' There has been much discussion about the measurement of structural propertiesbased on responses of individuals within the organization. Blau has referred tothese as "structural effects" and suggested measuring them by weighing the responsesof all individauls in an organization on a given variable equally. See Peter M. Blau,Formal Organization: Dimensions of Analysis, American Journal of Sociology. 63Quly 1957), 58-69; also Structural Effects, American Sociological Review. 25 (April1960), 178-193. James A. Davis, Joe L. Spaeth, and Carolyn Huson, referring tosuch organizational properties as "compositional effects," have pointed out someproblems with Blau's approach and offered an alternative methodology. See JamesA. Davis et al., A Technique for Analyzing the Effects of Group Composition, Ameri-can Sociological Review, 26 (April 1961), 215-225. Arnold S. Tannenbaum andJerald G. Bachman have appropriately pointed out weaknesses in the methodologiesof the works of both P. Blau and J. Davis and his associates. See Arnold S. Tannen-baum and Jerald G. Bachman, Structural versus Individual Effects, American Journalof Sociology, 69 (May 1964), 585-595. Although these discussions have some implica-tions for the present research, the concern has been more with relating "structuraleffects" or "compositional effects" to each other. That is, the organization was takenas a unit of analysis and, thus, individual effects are not separated from structuraleffects. An alternative method of measuring "structural effects" or "compositionaleffects" is used, first computing "social position" scores and then aggregating theseto represent the organization. This methodology makes it possible to focus on moremeaningful sociological processes, and avoids getting embroiled in the "whole isgreater than the sum of the parts" controversy.

8 The procedures suggested by Blau have pitfalls. See Blau, Structural Effects,op. cit. A similar procedure has been suggested by H. C. Selvin and W. O. Hagstrom.Their procedure involves giving equal weight to each individual respondent re-gardless of social position; however, there were few discernible social positions inthe college residence groups that they studied, so this problem did not arise. SeeHannan C. Selvin and Warren O. Hagstrom, The Empirical Classification of Groups,American Sociological Review, 28 (June 1963), 399-411.

oishikHighlight

STRUCTURAL PROPERTIES '7'7

method utilized in selecting respondents. It attempted to repre-sent organizational life more accurately by not giving undueweight to those occupants of social positions having little powerand little involvement in the achievement of organizational goals.

Computation of means for each social position had the advantageof avoiding the potential problem created by the use of two sam-pling ratios. In effect, responses were standardized by organiza-tional locationlevel and occupationand then combined intothe organizational score. Computation of means of social positionalso had a major theoretical advantage. It focussed on the socio-logical perspective of organizational reality. From a sociologicalpoint of view, an organization is a collection of social positionsand not an aggregate of individuals. While it is true that individ-uals work in organizations, they do so as occupants of social posi-tions and thus this is the starting point for the computation ofproperties such as centralization, formalization, and complexity.These sociological properties refer to how positions are arrangedin the social structure, not individuals who can come and gowhile the positions remain.

Structural PropertiesThe degree of centralization, how power is distributed among

social positions, was measured in two ways. The first measure,which we call participation in decision making, represents howmuch the occupants of various positions participate in decisionsabout the allocation of resources and the determination of organi-zation policies. These decisions affect the organization as a whole.Degree of participation in decision making was measured by ob-taining an average of participation by staff members in organiza-tion-wide decisions such as the hiring of personnel, the promotionof personnel, the adoption of new policies, and the institution of

"The computation of organizational scores on the basis of positions and on thebasis of individuals produced very similar results for the variables reported in thispaper. The Pearson correlation coefficient of scores using these two procedures wereas follows:

Hierarchy of authority .70 Rule observation .88Actual participation in decisions .90 Professional training .90Job codification .68 Professional activity .87

oishikHighlight

78 ADMINISTRATIVE SCIENCE QUARTERLY

new services.^ " These areas of decision making are common tomost organizations, and represent decisions about the allocationof organizational resources such as men and money, which areamong the most basic kinds of decisions made in an organization.

The second measure of how power is distributed among socialpositions is the degree of hierarchy of authority. This refers todecisions involving the work associated with each social position.If the occupants are allowed to make their own work decisions,then there is little reliance upon the superordinates and thus alow reliance on hierarchy of authority for social control. In con-trast, if all work decisions must be referred to the occupant of theposition immediately superior in the chain of command, this is agreat hierarchy of authority. Since work decisions are related tothe chain of command as represented in an organization chart,the name hierarchy of authority appears to be the most appropriatedesignation. The measures of the hierarchy of authority and thetwo indicators of formalizationjob codification and rule ob-servationwere developed by a factor analysis of two batteriescreated by Hall."

10 The index of participation in decision making was based on the following fourquestions:

1. How frequently do you usually participate in the decision to hire new staff?2. How frequently do you usually participate in decisions on the promotion of

any of the professional staff?B. How frequently do you participate in decisions on the adoption of new policies?4. How frequently do you participate in the decisions on the adoption of new

programs?Respondents were assigned numerical scores from 1 to 5 depending on whetherthey answered never (1), seldom (2), sometimes (3), often (4), or always (5), to thesequestions. An average score on these questions was computed for each respondent;then the data were aggregated into organizational scores as described.

11 Two scales developed by Richard Hall, hierarchy of authority and rules, whenfactor analyzed provided five factors. One was excluded because it applied only toa few organizations. Another was excluded because its items had little substantivemeaning as a single factor. The three remaining factors were called hierarchy ofauthority, job codification, and rule observation.

The index of hierarchy of authority was computed by first averaging the repliesof individual respondents to each of the following five statements:

1. There can be little action taken here until a supervisor approves a decision.2. A person who wants to make his own decisions would be quickly discouraged

here.3. Even small matters have to be referred to someone higher up for a final answer.

STRUCTURAL PROPERTIES tjgFormalization represents the use of rules in an organization.

Job codification is a measure of how many rules define what theoccupants of positions are to do while rule observation is a mea-sure of whether or not the rules are employed. In other words,the variable of job codification represents the degree to whichthe job descriptions are specified, and the variable, rule observa-tion, refers to the degree to which job occupants are supervisedin conforming to the standards established by job codification.Job codification represents the degree of work standardizationwhile rule observation is a measure of the latitude of behaviorthat is tolerated from standards.

Organizations have not only been called formal, but complex.We interpret complexity to mean at least three things: the num-ber of occupational specialities, the professional activity, and theprofessional training. Organizations vary in the number of oc-cupational specialities that they utilize in achieving their goals.This variable was measured by asking respondents to reporttheir major duties; each respondent was then classified accordingto the type of occupational speciality, e.g., psychiatrist, rehabilita-tion counselor, teacher, nurse, social worker, and so on. The vari-able, degree of professional activity, reflects the number of pro-fessional associations in which the respondents were involved, thenumber of meetings attended, and number of offices held or

4. I have to ask my boss before I do almost anything.5. Any decision I make has to have my boss's approval.

Responses could vary from one (definitely false) to four (definitely true). Theindividual scores were then combined into an organizational score as describedabove.

The index of job codification was based on the following five questions:1. I feel that I am my own boss in most matters.2. A person can make his own decisions without checking with anybody else.3. How things are done here is left up to the person doing the work.4. People here are allowed to do almost as they please.5. Most people here make their own rules on the job.

Replies to these questions were scored from one (definitely true) to four (definitelyfalse), and then each respondent's answers were averaged.

The index of rule observation was computed by averaging the responses to eachof the following two statements:

1. The employees are constantly being checked on for rule violations.2. People here feel as though they are constantly being watched to see that they

obey all the rules.

8o ADMINISTRATIVE SCIENCE QUARTERLY

number of papers given at professional meetings.^ ^ The amountof professional training was based on the amount of college train-ing as well as other professional training.^^ Each of these threeproperties represents a different aspect of the degree of profes-sionalism of the staff of an agency. The first is a measure of thenumber of professional occupations; the second is a measure ofhow professionally active the job occupants are; and the third isa measure of the professional training of the job occupants.

The measurement of each of these seven properties was basedon the arrangement and characteristics of the social positions inthe organizations. For example, participation in decision makingrepresents the variability in positions that were involved in de-cisions about the allocation of resources; hierarchy of authorityrepresents the degree of autonomy in work among the positionswithin an organization, and job codification represents the aver-age standardization of work by rules for the positions. The sevenproperties discussed in this paper are not the only ones that mightbe considered, but they include those that have been prominentin some of the theoretical and empirical literature, and thereforeprovide a useful starting point for comparative analysis.^ *

FINDINGS AND DISCUSSIONThe degree of centralization in an organization may be defined

either as the degree of participation in decision making or the

12 The index of professional activity was computed as follows:1. One point for belonging to a professional organization.2. One point for attending at least two-thirds of the previous six meetings of the

professional organization.3. One point for presenting a paper or holding an office in a professional or-

ganization.The maximum score was three points and the minimum score was zero.

^ An index of professional training was computed as follows:Score Professional training

0 Lack of training beyond a college degree and lack of other professionaltraining.

1 Lack of training beyond a college degree, but other professional training.2 Training beyond a college degree and lack of other professional training.3 Training beyond a college degree and other professional training.

i*See Pugh et al., op. cit., for a discussion of a number of these properties; areview of many of these concepts can be found in Victor A. Thompson, ModemOrganisations (New York: Alfred A. Knopf, 1961), ch. 2-5.

STRUCTURAL PROPERTIES 8 l

degree of reliance on the hierarchy of authority. The first defini-tion was used, at least implicitly, in a study of American univer-sities by the American Association of University Professors andin studies by Morse and Reimer, Kover, Tannenbaum, and Cilli^ .^ ^The second definition was used by Hall, Blau and Scott, andothers concerned with the concept of span of control.^ *" Since bothapproaches have been used extensively in the literature, it seemsbetter to examine them separately in order to determine the rela-tive predictive power of each for the other organizational prop-erties. Since these two indicators of centralization are themselvesstrongly related (r = -.55), a partial correlation analysis was madeto determine the independent effects of each of these measuresof centralization on the other structured properties.

Participation in Decision Making and Other Structural PropertiesThe degree of participation in decision making in the profes-

sional and semiprofessional social welfare organizations studiedvaried from 1.68-3.69 in a possible range of scores from 1 (lowparticipation) to 5 (high participation). Litwak suggested thatorganizations performing primarily nonuniform tasks were morelikely to be decentralized." Since the organizations studied pro-vide health, education, and welfare services, they are essentiallymore likely to be decentralized than organizations that provideservices susceptible to greater standardization.

15 American Association of University Professors, The Place and Function ofFaculties in College and University Govemment, A.A.U.P. Bulletin, 41 (1955), 62-81; Nancy Morse and Everett Reimer, The Experimental Change of a Major Or-ganizational Variable, Journal of Abnormal and Social Psychology, 52 (1955), 120-129; Arthur J. Kover, Reorganization in an Advertising Agency, Human Organiza-tion, 22 (Winter, 1963-1964), 252-259; Arnold S. Tannenbaum, The Concept ofOrganizational Control, The Journal of Social Issues, 12 (1956), 50-60; and Francis S.Cilli6, Centralization or Decentralization (New York: Columbia University, 1940).This is not an exhaustive list, but is designed only to indicate some representativestudies of this point of view.

i*Hall, op cit.; Peter M. Blau and W. Richard Scott, Formal Organization (SanFrancisco: Chandler, 1962), pp. 140-164; Lyndall F. Urwick, The Manager's Spanof Control, Harvard Business Review, 34 (1956), 39-47. See Allen H. Barton, Or-ganizational Measurement (New York: College Entrance Examination Board, 1961),pp. 29-31, for a brief discussion of these different approaches to the measurementof centralization.

1'Eugene Litwak, Models of Bureaucracy Which Permit Conflict, AmericanJournal of Sociology, 67 (1961), 177-184.

82 ADMINISTRATIVE SCIENCE QUARTERLY

Job codification refers to the degree of standardization of workand is similar to Weber's concept of office; i.e., a job in whichthe duties are clearly specified.^ ^ Although Weber never hy-pothesized relationships between the presence of highly definedoffices and centralization of authority, it is implicit in his analysis.As power becomes more centralized; i.e., as fewer and fewer peoplemake more and more of the decisions, it becomes imperative todevelop clear-cut rules because of the pressure of time. Leaderscannot spend all their time making decisions about work sothey codify past decisions into rules specifying what job occupantsare suppose to do. Rules are in this sense decisions for routineprocedures or problems as well as the guidelines for the behaviorof the job occupants. Conversely, the absence of highly codifiedjobs can facilitate the decentralization of power. Under suchcircumstances, participants lower in the hierarchy are not con-trolled by rules and regulations, and they can gradually augmentthe power of their positions, and may undermine the power struc-ture of the organization. Mechanic has suggested a number ofways in which this can occur.^ ^ Crozier's studies have suggesteda relationship between low participation in decision making anda high degree of job codification.^ Gouldner's case study of thegypsum plant indicates how a manager was forced to developrules after he reduced the workers' participation in decisionmaking. ^ ^

There was little variation in job codification in the agenciesstudied. The scores ranged from 2.22 to 2.70 on an index withpossible scores of 1 (low job codification) to 4 (high job codifica-tion). This scale had the least variation of any in the study. Asindicated in Table 1, there is a small negative relationship be-tween participation in decision making and the amount of jobcodification (r = -.12). This may be a consequence of the natureof the work of these organizations; it would be difficult to stan-

"For an expanded discussion of this point, see Jerald Hage, op. cit.. 297-299.18 David Mechanic, Organizational Power of Lower Participants, Administrative

Science Quarterly, 7 (December 1962), 349-365.20 Crozier, op. cit.2iAlvin Gouldner, Patterns of Industrial Bureaucracy (Glencoe, 111.: The Free

Press, 1954).

STRUCTURAL PROPERTIES

Table 1. Correlation between participation in decision makingand other structural properties.

Structural properties

Hierarchy of authorityJob codificationRule observationNumber of occupational specialtiesProfessional trainingProfessional activity

Zero-ordercorrelation*

-.55-.12-.26+.30+.68+.74

Partialcorrelationt

- .52- .22+.28+.37+.53+.14

The measures of association reported here are Pearsonian product-moment corre-lation coefficients. The units of analysis are the sixteen organizations in the study,not the 314 individual respondents.

t Each partial correlation is computed with the remaining five variables used ascontrols. See Mordecai Ezekiel and Karl A. Fox, Methods of Correlation and Re-gression Analysis (New York: John Wiley. 1959), pp. 192-196.

dardize physical and social rehabilitation services.Decision makers can enforce regulations by constantly watching

subordinates closely, what Rushing has called surveillance.^^ Thereasoning for expecting a relationship between participation in de-cision making and rule observation is that if few people participatein decision making about organizational objectives, there is likelyto be little commitment to new policies on the part of nonpar-ticipants. Under such circumstances there is likely to be a greaterneed for enforcement of rules in order to ensure conformity withorganizational regulations. Table 1 shows that rule observationis higher in those organizations with little participation in decisionmaking (r = -.26), although the relationship is not a strong one.

The number of occupational specialties is a measure of thedivision of labor in an organization. The number of professionaloccupational specialities in the agencies studied ranged from oneto eighteen. Thompson has suggested that as the number ofoccupational specialties increases, there is an inevitable strain to-wards decentralization.^ Couldner has called this strain the de-

22 William A. Rushing, Organizational Rules and Surveillance, AdministrativeScience Quarterly, 10 (March 1966), 423-444.

23 Victor A. Thompson, Hierarchy, Specialization, and Organizational Conflict,Administrative Science Quarterly, 5 (March 1961), 485-521. For a review of anumber of case studies supporting this, see Hage, op. cit.

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

oishikHighlight

84 ADMINISTRATIVE SCIENCE QUARTERLY

sire for functional autonomy.^ * This process has been documentedby Strauss in a study of purchasing agents.^ ^ It can also be arguedthat if decision making is limited to a small group, the need fornew occupational specialties will not be readily recognized. Inthis study a positive relationship was found between participationin decision making and the number of occupational specialties(r = .30), as shown in Table 1.

For the degree of professional activity of job occupants, thescores of the organizations in the study varied from .9 to 2.5 in apossible range from 0 (low) to 3 (high). Presumably the greaterthe professional activity, the greater the demands for participationin organizational decision making. A number of case studies havesuggested that professionals demand not only more job autonomy,but more power in general.^ * Conversely, as the job occupantsin an organization demonstrate more competence and expertise,men with power are more likely to consult with them, thus shar-ing decision making to a greater degree. Table 1 indicates thatthese two variables are indeed strongly related (r = .74).

Buley, Lazarsfeld and Thielens, Kahn, Tannenbaum, and Weisshave all related level of education to various indicators of organi-zational performance and found that higher levels of trainingindicate higher organizational performance at least as far as thequality of service provided is concerned.^ ^ As in professionalactivity, highly trained persons are more likely to demand par-ticipation in organizational decisions. The agencies studied variedbetween 0.7 and 2.3 on this measure of professionalism on ascale with a possible range of 0 (low) to 3 (high). An organizationwith a highly trained staff is more likely to have wide participa-tion in decision making (r = .68), as shown in Table 1.

Some of the organizational properties examined are themselveshighly interrelated (see Table 2). There is a very high positive

2*Alvin Gouldner. "Organizational Analysis," in Robert K. Merton, LeonardBroom, and Leonard S. Cottrell (eds.). Sociology Today (New York: Basic Books,1959), pp. 400-428.

25 George Strauss, Work-Elow Frictions, Interfunctional Rivalry and Profession-alism, Human Organizations, 23 (Summer, 1964), 137-150.

29 For a review of these findings, see Blau and Scott, op cit., pp. 60-70; and WilliamKornhauser, Scientists in Industry (Berkeley: University of California, 1962), ch. 1.

^ For a review of these and other studies, see Barton, op. cit., pp. 6-8.

STRUCTURAL PROPERTIES 85

Table 2. Correlations between five structural properties.*

Structural properties

Job codificationRule observationNumber of occupationsProfessional trainingProfessional activity

Rule obser-vation

-.03

Number ofoccupations

-.12-.06

Professionaltraining

-f.17-.43-f.O7

Professionalactivity

-.03-.19-f.294-.72

See footnote to Table 1.

correlation between professional training and professional activity(r = .72). The number of occupational specialties is positivelycorrelated with professional activity (r = .29), and hierarchy ofauthority is strongly associated with participation in decisionmaking (r = -.55).

Since some of these zero-order correlations might disappear ifother organizational properties were used as controls, a partialcorrelation analysis was made in order to determine the relation-ship between participation in decision making and each of thesix other organizational properties, using the remaining five ascontrol variables. For example, the relationship between partici-pation in decision making and hierarchy of authority was examinedusing job codification, rule observation, number of occupationalspecialties, professional training, and professional activity as con-trol variables. This shows the strength of association indepen-dently of the relationships with these other variables. These par-tial correlations are also reported in Table 1.

For each of the variables except professional activity and ruleobservation, the association with participation in decision makingremains substantially the same, even with the other five variablesused as controls. The partial correlations of participation in de-cision making with job codification (rp = - .22) and number ofoccupational specialties (rp = .37), actually increased slightly. Theassociation with hierarchy of authority remained unchanged (rp =-.52), whereas the association with professional training slightlydecreased (rp = .53). This suggests that the associations betweenparticipation in decision making and most of these organizational

86 ADMINISTRATIVE SCIENCE QUARTERLY

properties are not spurious. Although still other structural prop-erties could be used as controls, each o the partial correlationsreported in Table 1 represents an association with five controls.Even though hierarchy of authority was used as a control, therelationships between participation in decision making and theother five organizational properties remain essentially unchangedwith the exception of professional activity and rule observation.The association between this variable and participation in decisionmaking (r^ = + .28) was reversed in direction when the otherfive variables were controlled.

Hierarchy of Authority and the Other Structural PropertiesThe same reasoning as to why participation in decision making

should be related to the other properties can be applied to hier-archy of authority. Since hierarchy of authority measures thedegree of freedom in work decisions, a stronger case might bemade for this indicator of centralization than participation indecision making in predicting other organizational properties.Blauner has suggested that workers are more concerned aboutcontrol over the immediate work process than they are concernedwith control over managerial policy.^ ^ The concern with workappears to be similar to our measure of hierarchy of authority,while the concern with policy appears similar to our measure ofparticipation in decision making. The professional staff membermay have a greater expectation of autonomy over his own workthan he has the expectation of participating in the shaping oforganizational policies. It seems reasonable to expect that the elitesof organizations that employ professional staffs would provideconsiderable autonomy to these professionals in making workdecisions, even though they might not allow them a voice in theallocation of organizational resources.

The correlations between hierarchy of authority and the otherorganizational properties are reported in Table 3. There is noassociation between hierarchy of authority and the number ofoccupational specialties (r = .03); a moderate association betweenhierarchy of authority and job codification (r = .14) and profes-

28 Robert Blauner, Alienation and Freedom (Chicago: University of Chicago,1964), ch. 2.

STRUCTURAL PROPERTIES

Table 3. Correlation between hierarchy of authority and otherstructural properties.

Structural propertiesParticipation in decision makingJob codificationRule observationNumber of occupational specialtiesProfessional trainingProfessional activity

Zero-ordercorrelation*

Partialcorrelation!

- .55-f.14-(-.43-t-.O3-.29- .42

- .52- .02-f.53-f.40+.46- . 3 1

See footnote in Table 1.t See footnote t in Table 1.

sional training (r = - .29); and a strong association with both ruleobservation (r = .43) and professional activity {r = - .42). Thegreater the emphasis on the chain of command for work decisions,the less the professional activity and the greater the rule observa-tion. Again, it is hard to argue any particular cause and effectrelation. Professionally active staff members are likely to demandfreedom to make their own decisions as well as freedom frombeing supervised too closely. It should be noted that the zero-order correlations reported in Table 3 are in general smaller thanthose reported in Table 1 for participation in decision making.Control over organizational resources appears to be more stronglyrelated to these other structural properties than to control overwork decisions.

When the partial correlations in Table 3 are examined, manyof the associations between the hierarchy of authority and theother structural properties either disappear or reverse in direc-tion. The association with degree of job codification disappears(rp = - .02); and the association with both the number of occupa-tional specialties (rp = -I- .40) and degree of professional train-ing (rp = + .46) is positive. The partial correlation with thedegree of professional activity diminishes, although it remainsin the predicted direction (rp = -.31). The only relationshipthat became stronger when the other properties are used as con-trols is that with rule observation (rp = + .53). This was the only

88 ADMINISTRATIVE SCIENCE QUARTERLY

variable related to participation in decision making that wasreversed in the previously reported partial analysis.

The continued strong association between rule observationand hierarchy of authority suggests that these may be two aspectsof the more general property, closeness of supervision. This con-cept has been used in both senses; that is, the supervisor's mak-ing most of the work decisions and the supervisor's overseeing hissubordinates closely. It would appear that these do in fact occurtogether.

Tables 1 and 3 together seem to indicate the following inter-relationships for the sixteen organizations studied. Participationin decision making seems to be the more important dimension ofthe distribution of power than hierarchy of authority. At leastfor the properties of organizational structure measured, controlover organizational resources is a better predictor of other struc-tural properties than control over work decisions. An organiza-tion that has wide participation in decision making is also likelyto have less job codification, less rule observation, more occupa-tional specialties, more professional training, and more profes-sional activity. The organization is also likely to have less relianceon the chain of command; that is, as participation in decisionmaking about organizational resources increases, the job occu-pants are more likely to have greater control over their ownwork decisions. As freedom to make work decisions diminishes,rule observation increases and professional activity decreases.

On theoretical grounds it seems appropriate for participationin decisions about the allocation of organizational resources tobe a more important dimension of power than control over one'sown work. At the same time, participation in decision makinghas a strong relationship to hierarchy of authority, which in turnis related to rule observation and the amount of professionalactivity. The two partial correlation analyses suggest that ifthere is reduced participation in decision making, there is likelyto be more reliance placed on supraordinates making work de-cisions and this in turn increases rule observation. Only longi-tudinal research can accurately determine the precise connectionsbetween these variables. We are presently engaged in collecting a

STRUCTURAL PROPERTIES 89

Table 4. Relationship between indicators of low centralizationand of high complexity and low fonnalization.

Indicator ofhigh complexity

Large number of occupational specialtiesHigh professional trainingHigh professional activity

Indicator of lowformalization

High job codificationHigh rule observation

Indicators of low centralization

High par-ticipation

.30

.68

.74

-.12-.26

Lowhierarchy*

-.03.29.42

-.14-.43

Support forhypotheses

moderatestrongstrong

weakmoderate

The sign has been reversed in this column from that reported in Table 3 to facili-tate comparisons between the two indicators of centralization.

second wave of interviews, in the same organizations, so that wecan study how a change in a variable like participation in decisionmaking affects the variable hierarchy of authority and vice versa.

Centralization, Formalization, and ComplexityAs suggested in the beginning of this paper, several general

hypotheses that interrelate these basic dimensions of social struc-ture have been suggested in a recently published axiomatictheory. The hypotheses are:

(1) the less the degree of centralization, the less the degree offormalization

(2) the less the degree of centralization, the greater the degreeof complexity

These hypotheses and the indicators for each variable are con-tained in Table 4.

The first hypothesis is weakly supported while the second hy-pothesis is strongly supported. That is low centralization, asmeasured by a high participation in decision making, has highercorrelations with the indicators of complexity than it does withthe indicators of formalization. It would appear that these twohypotheses have some empirical validity and are worth addi-

go ADMINISTRATIVE SCIENCE QUARTERLY

tional study, including the exploration of additional indicators ofcentralization, formalization, and complexity.

There are several implications to these two hypotheses relatingthe distribution of power with other aspects of organizational struc-ture. It would seem that both labels for organizationscomplexand formalthat have been used in the literature have an empiricalbasis. But each of these is related to a different kind of powerdistribution. Complex organizations are more likely to be de-centralized, that is, the occupants of many positions make decisions,while formal organizations are likely to be more centralized. Thisindicates two different and probably viable organizational arrange-ments of the power structure. The decentralized arrangementrelies upon the skills and expertise of its members while the cen-tralized arrangement relies upon rules. The former appearslikely to emphasize self-control while the latter appears to empha-size close supervision as a mechanism of control. Also the studyof two different measures of the power distribution indicatesthat close supervision is less likely when the members of an or-ganization are professionally active. And this is true when theyhave been professionally trained. In other words, even thoughthe hierarchy of authority does have less predictive power thanparticipation in decision making as a measure of the degree ofcentralization, these two indicators are themselves strongly inter-related and supply additional understanding to the structuralconsequences of either centralization or decentralization.

One might raise the question as to the utility of such abstractdimensions as centralization, complexity, and formalization. Ona more general level the distribution of power (centralization),the utilization of knowledge (complexity), and the utilization ofrules (formalization) are basic dimensions of all organizations.Recognizing these more abstract dimensions of organizationalstructure, alerts us to look for other, and perhaps better indicatorsof these dimensions than those measured in this study.

SUMMARY AND CONCLUSIONSThis paper has examined two different indicators of the dis-

tribution of power. One of these, participation in decision mak-ing, is a better predictor of other structural properties than hier-

STRUCTURAL PROPERTIES gi

archy of authority. Future research should explore still more in-dicators of centralization, complexity, and formalization, thusrefining measurement and predictability.

Can these findings be generalized to other types of organiza-tions? The sixteen organizations provide health, education, orwelfare services, and are all located in the same metropolitanarea. Some recent studies of business and personnel organiza-tions provide some supporting evidence for the validity of some ofthese findings. Chandler reports that large corporations in theUnited States were more likely to become decentralized afterthey had become involved in the manufacture of vastly diversi-fied products, suggesting that product diversity led to an in-crease in occupational specialties, which in turn resulted in de-centralization of decision making.^ * This was most likely tohappen when the managers were more professional, suggestingthat professionalism may hasten this process of decentralization.Woodward reports that business organizations in Great Britainwere more likely to be decentralized if they had skilled laborrather than unskilled labor, and managers trained professionallyrather than managers not professionally trained.*" Neither of thesestudies used the same measures of organizational properties usedhere. In a study of some 150 public personnel agencies, Blau,Heydebrand, and Stauffer report that the more professionalizedagencies were more likely to have decentralized power structures.^^Although they used span of control as an indicator of centraliza-tion, their study is consistent with the hypotheses relating lowcentralization to high complexity and low formalization. Eachof these studies provides some additional confirmation for thefindings presented here.

Throughout this paper, it has been assumed that the structuralproperties of an organization form a system of interrelated vari-ables. The nature of the data precludes making any causal in-ferences. Does an organization have wide participation in de-

20 Alfred Chandler, Jr., Strategy and Structure (Garden City, N. Y.: Doubleday,1966).

Joan Woodward, Industrial Organization: Theory and Practice (London:Oxford Press, 1965).

'1 Blau, Heydebrand, and Stauffer, op. cit.

92 ADMINISTRATIVE SCIENCE QUARTERLY

cision making, which then attracts more professionally trainedand professionally active job occupants? Or, does the addition ofnew occupational specialties, especially those requiring long train-ing and a high degree of professional activity, result in pressurestowards greater participation in decisions about organizationalresources? Similar questions can be raised about the time order-ing of changes in participation in decision making and jobcodification and rule observations. Such questions as these canonly be answered through longitudinal research.^ ^

82 This investigation was supported, in part, by a research grant from the Voca-tional Rehabilitation Administration, Department o Health, Education, and Welfare,Washington, D.C. We are deeply indebted to Professor Harry Sharp and the Wiscon-sin Survey Laboratory for their helpful suggestions and assistance in the preparationand execution of the interviewing involved in this study and to the University ofWisconsin Computing Center and the National Science Foundation for theirresearch support.