Factors affecting Organization structure

Organization structure

Definition

§  Formal relationships among various tasks, activities and people in the organization.

§  Framework  in which an organization arranges its authority , responsibility

Factors affecting Organization structure

1. Size

Small organization

                        Its structure can be simple/ no formal organization structure.

                        No specified job functions.

                         Individuals simply perform tasks based on their likes, dislikes, ability.

                        Rules and guidelines are not established

                        Small organizations are very often organic(respond to environment change) systems.

Large organizations

                        More complicated its structure.

                        More formal work assignments.

Some delegation of authority. 

Tasks are highly specialized.

Detailed rules and guidelines dictate work procedures. 

Superior subordinate relationship communication occurs through Authority, Responsibility

2.    Strategy

How an organization is going to position itself in the market in terms of its product is considered its strategy

2 Strategies  

a)    Differentiation  strategy

Always the first on the market with the newest and best product

b)    Cost -leadership strategy

Produce a product already on the market more efficiently and more cost effectively

3.    Environment

a)    Stable environment

The customers' desires are well understood and probably will remain consistent for a relatively long time.

Examples include manufacturers of items such as detergent, cleaning supplies, and paper products.

Here mechanistic structures would be advantageous.

b)    Dynamic environment

The customers’ desires are continuously changing.

Example of an industry functioning in a dynamic environment is electronics.

Technology changes, so do the desires of consumers.

Here organic structures would be advantageous.

4.    Technology

Types of technology involved in production

a)    Unit production

It refers to production of individual items tailored to a customers specifications.

Example: custom-made garments.

b)    Mass production

It refers to a large number of uniform goods in an assembly-line system. Workers are highly dependent on one another, as the product passes from stage to stage until completion.

Example: manufacturing of machine parts

c)     Process production

It refers to the production of materials that are sold by weight or volume.

                                    Example: chemicals

                                    Manpower increases from unit to mass production, span of management increases.

But if information technology is to be used, manpower requirement may decrease bcz of the work done by the computer.