The Dual Function of Organizational Structure

How do organizational structures influence organizational decision making? This article reveals organizational structures’ dual function: they both (1) aggregate and (2) shape individuals’ decisions. What makes this dual function so remarkable is that the two effects are diametrically opposed to one another. Ceteris paribus, a less stringent decision-making structure reduces the amount of support required for a given project to be greenlit at the organizational level, which should result in more investments getting approved. However, we find that this ceteris paribus assumption does not hold, because a less stringent decision-making structure also reduces individuals’ tendency to provide their support for an investment. Our experimental investigation of organizational voting provides evidence for our position that organizational structure plays an important role beyond mere aggregation: voting thresholds also affect individuals’ voting behavior. The combination of both effects explains why the organizational adoption of a new voting threshold may not yield the intended outcome. Funding: This work was supported by a National Science Foundation CAREER Award from the Directorate for Social, Behavioral and Economic Sciences [Grant 1943688] granted to O. Schilke. Supplemental Material: The online appendices are available at https://doi.org/10.1287/orsc.2023.1653 .