"Is there one best way to structure an organisation?"
Organisation is an entity in which people work together to accomplish a set of goals. Organisations have certain pattern of activities, that is, structures. There is no best way to structure an organisation, since the structure is always adapted to best serve the functions of the organisation. The optimal organisational structure is contingent upon both internal (such as strategy, size, and technology) and external situations (such as external environment) – this is referred to as ‘Contingency Theory’. Based on the academic articles as well as the empirical evidence provided, four contingency factors are covered to justify my position, including strategy, technology and innovation, environmental uncertainty, and size.
Firstly, strategy is an important contingency of organisational structure. One of the most important features of an organisation is the goal. Organisations utilise different strategies to accomplish their goals, and a variety of organisation structures are adopted to best serve the strategies since an appropriate structure is critical to the effective strategy implementation. In the early 1960s, Chandler developed the contingency model which research on the strategy-structure relationship within companies (Qiu & Donaldson 2010), he suggested that the optimal organisational structure is contingent on various factors, including the strategies (Pertusa-Ortega, Molina-Azorın & Claver-Cortes 2010). In the 1970s, the structural contingency model was extended to multinational corporations (MNCs) (Qiu & Donaldson 2010). Based on the research since then, Qiu and Donaldson (2010) constructed the Cubic Contingency Model which incorporates the previous models to propose the structure-strategy fits for nine MNC structures. The nine structures fit for different levels of contingent strategies which mean that the design of the structure of an organisation is highly contingent on the...
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