Organizational Structure: Influence on Logistics Integration, Costs, and Information System Performance

Organizational structure significantly influences firm performance. A recent survey of logistics professionals revealed that centralized structures accommodated logistics system integration better than decentralized structures. Also, centralized firms spent a lower percentage of net sales on logistics costs and information system support costs than decentralized firms. On the other hand, no signficiant differences were identified between centralized and decentralized firms in terms of information system performance. Information system support needs were addressed comparably regardless of organizational structuring. However, while centralized and decentralized firms exhibited similar capabilities in terms of effectiveness (reaching goals), centralized firms appeared to be more efficient (resource utilization).