Contingency Factors Affecting Structural Choice

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Factors Affecting Structural Choice

When the yahoo CEO, Carol Bartz came into existence, she found that the cofounder Jerry Yang was hobbled by some slow process of decision making as well as ineffective way of execution for all those decisions. Bartz also mentioned that “plenty enough has been blogging the company”. For such a company like Yahoo, it has been seen that they are losing web search for industry with continuous change. Thus Bartz made a process that could take the company towards streamlined structure with faster feet. Most of the top rated managers had also thought of putting exceptional designing structure through this. This structure would depend upon features like: strategy of organization, size, and technological service and also environmental uncertainly degree.

Strategies and structures:

Whatever is an organizations structure it should always be able to facilitate the organization with goal achievement. This is so because goals play a very crucial role for organizations strategy as both strategy and structures are relatively linked together. This was initially being researched by Alfred Chandler. After studying various companies from US he concluded about changes of a corporate company leads to transformations within an organization structure.

Various researches showed some of the designs of structure works well with organizational strategy. For example, flexibility with free flown information’s of organic structure is working all well with unique innovations. Mechanistic organizations along with their efficiency, tightly controls and stability works well for tight control over costing.

Structure with sizes:

Many evidences have been found that size of an organization affects their structure. Organization with over 2000 plus employees are considered for largest and they will have more number of specialization, centralization, departmentalization and also better rules and regulation than those of other smaller organizations. Once any organization grows of certain size then definitely later the size wouldn’t affect them. With that 2000 employees rate the organization will be mechanistic adding of 500 more won’t affect much. But addition of 500 employees to an organization with 300 employees will help them to be mechanistic.

Structure and the technology:

Every organization is seen using some kind of technology for better rate of input and output. For example, Whirlpool’s workers from Brazil are facilitated with micro ovens, air conditioners, that too on standardized line of assembly. Similarly the employees of FedEx and other print services are great at producing custom designing for individual customer. Whereas the employees from Bayer’s in Karachi are good at production of pharmaceuticals for a continuous flow lining.

The initial researches over technological affect over structures are traced by Joan Woodward a small student of small manufacturing organization from England. She determined to which extent materials are related for structural designing. She was with no consistency of patterns until she had divided her firms to three unique technologies with levels of more complexity. The initial one included unit production where production of products is done in units. Secondly it was mass production, for larger batches of manufacturing. Lastly process production, includes production process in continuity. A brief summary is well described at Exhibit 10-9.

Other such studies also reveal that organizations always make adaptation of their structures as per the technology available. They depend upon the technological input and output. The more your technological routine is the more mechanistic a structure would be. Organization for more number of non routine is organic structures.

Uncertainty of environment and their structures:

Some of the environments are seen facing the top level of uncertainties form environment. Similarly, other organizations have to face dynamic as well as complex environment. By the adjusting of structure of organization most of the managers are seen minimizing the rate of uncertainty. In the case of simple environment the rate of mechanistic rises. More number of uncertainties the more would be flexibility required for organization. For instance, uncertainty through Oil Company’s nature would predict need of flexibility. After being the CEO of Royal Dutch Shell PLC, Jeroen has streamed structure of industry. He even tried eliminating the cumbersome processes of the company with the use of analytical processes and by making various deals with the OPEC companies.

Today’s views:

The structure of environment these days are symbolizing why are the managers today trying to restructure their organizations for being lean, faster and also flexible. Examples of dynamic forces of environment includes global competitions, accelerations, innovative products launch by competitor, economically downturns, increment in the demands of customers for higher quality, fastest delivery, and many more. Thus it is clear that mechanistic organizational are especially not meant for responding against environmental changes and uncertainty.

Contingency Factors Affecting Structural Choice 9



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