Organizational technology as a mediating variable in centralization‐formalization fit

Purpose – With a view to contributing to a better understanding of the interactions between design dimensions, the authors aim to present a formal model that analyzes the internal fit relationship between centralization and formalization, taking into account organizational technology and the “systems approach”. Design/methodology/approach – Based on the study by Zeffane, the authors develop an alternative, formal model that introduces organizational technology and assumes that greater structural control does not necessarily lead to better organizational integration. The model equally considers the possibilities of underfit and overfit. Findings – The proposed formal model provides a sound rationale on how organizational technology determines the contribution of centralization and formalization to the achievement of integration. The complementary interactions between design dimensions result in very clear patterns, with all the complementary choice variables tending to be done together at a comparable level. Also, it evidences that only a finite of feasible set of intermediate choices exists. Research limitations/implications – In the interests of simplicity, the model does not include other contingency factors, such as environment and strategy, nor does it address the question of non‐concavity of the objective function that allows equifinality. Questions such as whether the consequences of underfit are different from those produced by overfit should be addressed in further research and model developments. Originality/value – This paper develops a rationale for better understanding the interactions between design dimensions, such as centralization and formalization and helps to fill the research gap related to the absence of analytical models that allow a rigorous analysis of the internal relationships between different organizational design dimensions.