Organizational structure describes the way a company appoints and arranges people to a job. This people will then forma the structure of the company. The company will then create and define the roles and responsibilities of each of these people giving them a department and title. Thinkers such like Max Weber, Fayol and Taylor in the early years of management focused on the idea of the structure that is more approachable universally; they focused on traditional organizational design that was simple, functional and divisional (Robbins, et al., 2008). Today, we see a different perspective and impact in the organizational structure; such as the nature of the environment, technology, size and strategy. Nevertheless other factors like technology, media, and environment has also changed the ideas used by the early thinkers. For example, Weber’s idea on bureaucracy was suitable in various conditions but in the later stages several structural designs become more suitable to be used (Cole and Kelly, 2004). This situation has changed its businesses approaches with its new techniques and technology to suit the growing industry. In this essay, firstly we will discuss how contingency variables such as environment, technology, size and strategy impacts an organizational structure. Secondly, we will focus to evaluate contingency theory’s value to contemporary managers as they engage in organizational design. Finally will conclude on how contingency theory has influence an organization structure in recent observation and experience. Environment – Structure of an Organization
An organizational structure is a formal framework by which tasks are divided, grouped and coordinated (Morgan, 2006). Factors such as politic, social and legal issues do hand-in-hand affect and impact its organizational decisions. For example, issues on the attack of September 11 in United States resulted towards a drop on airline travel, and this indicates that an environment has no boundaries to control an organization structure (Mills, et al., 2007). It is also said that the contingency variable environment impacts an organizational structure through its division by way of in-house organization and various tasks (Pfeffer, 1972). According to Lawrence & Lorsch (Cited from Cole and Kelly, 2004, p. 106-107) explains that a successful organization will require a more varied and vibrant environment at a certain level of both differentiation and integration. Example having a reliable and honest manager will produce high performing organizations. Furthermore working together in an open system organization enables us to be effective in delivering individual task delegated by a manager for creating a better environment. Besides that, the four distinct dimension of environment to structure (stability, complexity market diversity and hostility) could be linked and summarized as when an environment is more self-motivated that results to an additional organic structure, whereby, when an environment become difficult it results to decentralized its structure (Mills, et al., 2007). This is supported with the development of e-commerce where it has created a dynamic and complex environment on retail book and clothing industry such an environment. This has therefore produced new network structures that are highly manageable (Mills, et al., 2007). Hence the environment plays a vital role towards any organizational structure and the impact is basically unpredictable with the influence of changes and other factors. Technology – Structure of an Organization
Technology has a great impact on how any organization is structured and how work is demonstrated within business activities. Today, computer networking system has become very popular within organizations who is adapting to their vast structure technology. It is believed to become more flexible for people to work inside or outside a working environment. People need not to be in the same place to receive and...
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