The Effects of Organizational Structure on Technological Innovation: An Empirical Study in Chinese Automobile Industry

In order to be able to compete in the changing and intensify competitive environment, companies hold technological innovation(TI) to be an important factor for success in today´s business environment. This paper examines the effects of organization structure (OS) variables on firm ´s TI performance in Chinese automobile industry. Five key aspects of OS are considered. They are formalization, locus of decision-making, hierarchical layers, internal boundary, and external boundary. A contingency approach is taken by simultaneously examining the moderating effects of firm size. Regression results show that all dimensions of OS which mentioned above, but locus of decision-making by way of an exception, have significant influence on TI performance. Subgroup analysis reveals that these main effects are, for the most part, moderated by firm size. The results suggest that firms seeking to attain high TI performance should consider the important role played by OS, and the managers need concern themselves with firm size when they reforming the OS to match the desired level of TI performance.