In a essay, explain why organizational structures differ. Define and provide an example of the four reasons why structures differ, which are as follows:
- Strategy,
- Organizational size,
- Technology, and
- Environment.
Organizational Research and Theory
Organizational structures are different. Different companies have different structures. The company usually forms the structure to enable an effective workflow. Functional, divisional, Matrix and Flat are common types of structures. Strategy, company size, technology, and environment are the main causes or reasons for the different structure of an organization.
Strategy
The strategic planning process is integrated with the structure of the firm. Strategy shapes the structure regarding work process and implementation. For Instance, if the firm decides to make several employee groups meet organizational goals and objective, the functional structure can be shaped. The purpose is to make every group of employees functional. Also, the strategy of the company may be a development of the new business division. For a new product, the firm may come up with a new division. Accordingly, the divisional structure is to be made by the company. Modern organizations are aiming to develop an integrated management system to improve the reporting process. A matrix structure is the best choice for the administration to enable dual employee reporting. The business strategy also creates an impact on the structure. When initiating the project, the structure of the firm can be combined. It looks like a combination of flat of hierarchical structure. After implementation of the strategy, the firm may change the structure (Baligh, 2006).
Organizational Size
The size of the company matters. The organization may depict a large organizational structure due to its size. A business that holds many divisions may demonstrate a big hierarchy. Conversely, small organizations may have a limited structure due to limited operations. The difference regarding the structure also depends on the size. The big size of the business needs a big and flexible structure to conduct different business operations. The firm focuses on effective information processing by shaping the structure. With the reduction of business divisions or operations, the firm can reshape the structure to save the business cost (Baligh, 2006).
Technology
Technology also plays an important role when shaping the structure. Through the effective use of the technology, the firm may create an integrated structure. Using technology at each level of the firm can reduce the number of employees. It has been observed that technology reduces the size of the business. Technology replaces the workforce, and accordingly, people are exhausted from the structure. Businesses usually come up with a virtual work environment, and it creates a dynamic structure. Fewer people are taking control of the business due to technology. If the firm does not use modern technology, it has to shape a big hierarchy to control operations (Zakrzewska-Bielawska, 2016).
Environment
The relationship between the environment and organizational structure is strong. Internal and external business environments revolve around several factors. For Instance, in the internal business environment, culture, employees, process, and other resources are the main factors. In a democratic work culture, the firm may need matrix structure because it fosters integration (Baligh, 2006). Conversely, the external business environment includes customers, market, competitors, and suppliers. Developing a separate business division can help a firm to gain a competitive advantage. However, it influences the structure. The firm has to make some structural changes to integrate with the external environment (Zakrzewska-Bielawska, 2016).
In the end, it is to conclude that strategy, size, technology, and environment are key sources for a firm to develop a different structure. Every firm may have a different consideration, and therefore, create a different structure. The structure of the company must be aligned with corporate goals and objectives. Structural flexibility is required in this competitive landscape to make some changes and exist strongly in the competitive industry. The effective control of the structure can produce good results for the business.
References
Baligh, H. H. (2006). Organization Structures: Theory and Design, Analysis and Prescription. Springer Science & Business Media.
Zakrzewska-Bielawska, A. (2016). Perceived mutual impact of strategy and organizational structure: Findings from the high-technology enterprises. Journal of Management and Organization, 22 (5), 599-622.
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