The moderating role of organizational structure in the relationship between technological capability and organizational performance

Purpose This study aims to investigate how organizational structure, specifically formalization and decentralization, moderates the relationship between technological capability and organizational performance. While prior research has examined technology and structure separately, little is known about how they interact. This study addresses that gap by assessing whether structural design can amplify or constrain the performance benefits of technological capability. Design/methodology/approach A quantitative survey was conducted with 95 respondents from Taiwanese enterprises. Validated measurement scales were used to assess technological capability, organizational structure and performance. Structural equation modeling was used to analyze both direct and moderating effects using latent variable interaction terms. Findings Both technological capability and organizational structure significantly improve performance. More importantly, organizational structure enhances the positive effect of technological capability. Organizations benefit most when formalized processes are paired with decentralized decision-making, enabling them to balance control with responsiveness. This alignment is especially critical for resource-constrained firms operating in fast-paced, technology-driven environments. Originality/value This study contributes to the literature by demonstrating that structural elements, often viewed as rigid or inhibiting, can, when strategically aligned with technological capabilities, enhance organizational flexibility and performance. The findings underscore that digital transformation success relies not only on technology investment but also on embedding those capabilities within supportive organizational structures.