Bureaucratic and Personalized Strategies for Efficiency and Organization An Investigation of Structures and Efficiency in a Set of 104 Profit‐seeking Firms

Barry R. Armandi and Edgar W. Mills

American Journal of Economics and Sociology, 1985, vol. 44, issue 3, 261-277

Abstract: Abstract. A causal model of the relationship between organization structure and economic efficiency in profit oriented organizations is proposed and tested. Applying path analysis to data collected from 104 savings and loan associations in New York State, the results show that structural characteristics explained 20 per cent of the variance in organizational efficiency and 8 per cent in managerial efficiency Specifically, span of control, promotion policy and practice, and personnel evaluation frequency are good predictors of organizational efficiency. Similarly, complexity, documentation, and managerial salary differences serve as major causes of managerial efficiency changes. Overall, determinants of the efficiency measures are different from one another a bureaucratic strategy evokes a response in managerial efficiency, while a personalized strategy produces changes in organizational efficiency.

Date: 1985
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