External Factors Affecting Organizational Structure

Topics: Organization, Natural environment, Environment Pages: 8 (2205 words) Published: December 4, 2010


The environment is the world in which the organization operates, and includes conditions that influence the organization such as economic, social-cultural, legal-political, technological, and natural environment conditions. Environments are often described as either stable or dynamic. ➢ Stable environment

• customers' desires are well understood
• remains consistent for a relatively long time
• Examples of organizations that face relatively stable environments include manufacturers of staple items such as detergent, cleaning supplies, and paper products. • mechanistic structures to be advantageous

• This system provides a level of efficiency that enhances the long-term performances of organizations that enjoy relatively stable operating environments ➢ Dynamic environment
• Customers' desires are continuously changing—the opposite of a stable environment • This condition is often thought of as turbulent • the technology that a company uses while in this environment may need to be continuously improved and updated • An example of an industry functioning in a dynamic environment is electronics. Technology changes create competitive pressures for all electronics industries, because as technology changes, so do the desires of consumers. • organic structure provides the greatest benefits • This structure allows the organization to respond to environment change more proactively. Organizations are now increasingly designed to be more organic now days. The HR Organizational Structure has to fit to new challenges born in the external environment. All the important and influencing people speak about the changes in the business world, as the current recession seems to be one of the worst recessions ever. The way the business was done will be discontinued and new business ethics and new business rules will be born. In Recession for example HRM Organizational Structure should be as flexible as possible, the HRM Employees should be really aware of the needs of the organization and they should be able to help the organization to survive the recession successfully. The HRM Organizational Structure Adjustment has to be based on the detailed analysis of the needs of the organization in the recession. Companies that nurture flexibility, awareness, and resilience are more likely to survive the crisis, and even to prosper. McKinsey-2009


Advances in technology are the most frequent cause of change in organizations since they generally result in greater efficiency and lower costs for the firm. Technology is the way tasks are accomplished using tools, equipment, techniques, and human know-how. By using tools, equipment and strategy, technology helps workers accomplish their core tasks at a quicker pace. If a company has the appropriate organizational structure blended with the right technology, it can attain organizational success. Joan Woodward found that the right combination of structure and technology were critical to organizational success. In her book Industrial Organization: Theory and Practice (1965), the English management scholar classified three categories of core-manufacturing technology: ➢ Small-batch production 

• Used to manufacture a variety of custom, made-to-order goods. • Each item is made somewhat differently to meet a customer's specifications by the skills of the workers who work together in small groups. • A print shop is an example of a business that uses small-batch production. • Appropriate structure for this type is decentralized and flexible • It works well in organic structure

➢ Mass production
• Automated machines are used that is programmed to make high volumes of standard products. • It’s used to create a large number of uniform goods in an assembly-line system. • Workers...
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