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

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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. [PUBLICATION ABSTRACT]