Customer-induced uncertainty in predicting organizational design: Empirical evidence challenging the service versus manufacturing dichotomy

With the growth of the service economy, an extensive literature has appeared that examines the unique design characteristics of service organizations. It has been suggested that service firms face a higher level of customer contact which requires specific adjustments in organizational design. Economic, technological, and strategic changes, however, have combined to blur this distinction. As a result, the original service/manufacturing dichotomy must be called into question. We suggest that customer-induced uncertainty rather than the service/manufacturing distinction has specific influence on organizational design. Using data from administrative managers, we found that service firms did not exhibit a higher level of customer-induced uncertainty than manufacturing firms and that customer-induced uncertainty, rather than a service/manufacturing distinction, predicted organizational design choices.