The effect of the competitiveness of an organization's environment on organizational structure is examined for 38 small manufacturing firms. Competitiveness is hypothesized to increase the demand for control and coordination within the organization. Consistent with this hypothesis, the extent of competition in the environment is positively associated with the frequency of reporting, the extent to which decision procedures are specified in advance and weakly associated with a relatively taller organizational structure. Evidence is also presented indicating that the competitiveness of an organization's environment interacts with production technology, the number of products, and the extent of product design and production process change in determining organizational structure. Change in product design and production process, and the number of products are associated with decentralization, less formalization, and more departments only in the less competitive environmental contexts.