Over the past decade, the reform of the formal structure of industrial management has been an important element in the general strategy of rationalization. From the perspective of systemic control, the central issue is clearly interbranch management structure. Without a fundamental reorganization of the central apparat of industrial management, such projects for the functional rationalization of management cannot be effectively incorporated into the management system.

Despite their evident importance, however, issues of interbranch and large-scale regional management structure are in a stage of early formulation, bitterly controversial, and fraught with major unresolved political and technical issues. Structural reform at this level is a central issue for the 1980s. In the 1970s, principal concentration was on the reform of the ministerial system.

Through the decade, two problems appear to have been particularly important in rationalizing the formal organization of the ministries. The first was to reverse the trend toward more complex organizational structures and increasing administrative costs. The second, closely related issue, was to prevent informal diffusion of power as well as to overcome the costs of excessive centralization. Within this framework, the core issue has been the relative roles which classical and cybernetic approaches should play in reorganization.

The model for the comprehensive rationalization of the internal organization of the ministries announced in March 1973 incorporates both approaches. Although a few ministries have taken a distinctly systems approach to organizational design, the great majority have routinely followed the classical bureaucratic model.