External Factors Affecting Organizational Structure

surround The environment is the world in which the plaque molds, and includes conditions that invite the organization such(prenominal) as economic, social-cultural, legal-political, technological, and natural environment conditions. Environments argon frequently described as either stable or dynamic. ? Stable environment customers desires atomic keep down 18 well understood remains consistent for a relatively long metre 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 achieveances of organizations that enjoy relatively stable operational environments ? Dynamic environment Customers desires ar continuously changingthe opposite of a stable environment This condition is often thought of as irritated the technology that a corporation uses while in this environment whitethorn need to be continuously improved and updated An example of an industry run in a dynamic environment is electronics.Technology changes fashion competitive pressures for tout ensemble electronics industries, because as technology changes, so do the desires of consumers. constitutive(a) structure provides the great benefits This structure all(prenominal)ows the organization to respond to environment change more proactively. Organizations ar direct increasingly designed to be more organic now days. The HR organizational organize has to fit to sore challenges born in the external environment. All the authoritative and influencing people speak about the changes in the business world, as the current recession seems to be one of the castigate recessions ever.The way the business was done lead be discontinued and new business ethics and new business rules testament be born. In break for example HRM Organizational Structure should be as ducti le as possible, the HRM Employees should be genuinely aware of the un barably 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 seeming to survive the crisis, and even to prosper.McKinsey-2009 Technology Advances in technology are the nearly 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 handed 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 distinguish organisational structure blended with the right technology, it can attain organizational success.Joan Woodward found tha t the right combination of structure and technology were critical to organizational success. In her book Industrial Organization Theory and Practice (1965), the face management scholar classified three categories of core-manufacturing technology ? Small-batch toil utilize to manufacture a variety of custom, do-to-order goods. Each item is made somewhat otherwise to meet a customers specifications by the skills of the workers who work in concert 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 ductile It work well in organic structure ? Mass production automatise machines are utilise that is programmed to make high volumes of standard products. Its used to create a large-mouthed number of uniform goods in an assembly-line system. Workers are highly dependent on one a nonher, as the product passes from gift to stage until completion. Equipment whitethorn be sophistica ted, and workers often follow detailed operating instructions while performing simplified jobs. Example-A company that bottles soda pop It full treatment well in rigid structure as has go tasks ceremonial structure or mechanistic structures is the trump out choice for workers who must perform repetitive tasks. ? Continuous-process production Create goods by continuously feeding stinging materials, such as liquid, solids, and gases, through a highly automated system. such(prenominal) systems are equipment intensive, but can often be operated by a relatively small labor force. Examples-automated chemical plants and oil refineries. A flexible structure is necessary to allow workers to react quickly to unexpected problems. It whole shebang well in organic structures The separate Technology factor that determines organizational structure is- ?IT-Knowledge management the sharing and integrating expertise within and amongst courses and divisions through real quantify interc onnected IT that allows for new kinds of task and insurance coverage relationships. CITATION 1. (CliffsNotes. com. Factors Affecting Organizational Design. 29 Oct 2010 . Read morehttp//www. cliffsnotes. om/WileyCDA/study_guide/Factors-Affecting-Organizational-Design. steericArticleId-8944,articleId-8881. hypertext mark-up language? citation=trueixzz13mZtlnHJ 2. Ref- HRM Organizational Structure HRM Advice Blog Adjustments in Recession http//hrmadvice. com/blog/2008/12/30/hrm-organizational-structure-adjustments-recession/ Technology/Task Consider tame processing at a bank. This activity is usually performed by a business unit that is highly full-dressized, has a great deal of specialization and division of labor, and high centralization of decision-making.In contrast, the creative section of an ad operation is usually not formalized at all, the division of labor is often blurry, and it is highly decentralized. It appears that true activities naturally go with certain structu res. Joan Woodward found that by knowing an organizations primary system of production, you could predict their structure Unit production/small batch. Companies that make one-of-a-kind custom products, or small quantities of products (e. g. , ship construct, aircraft manufacture, piece of furniture maker, tailors, printers of engraved wedding invitation, surgical teams). In these companies, typically, peoples skills and knowledge is more important than the the machines used. comparatively expensive to operate work process is unpredictable, hard to pre-program or automate. Flat organization ( a couple of(prenominal) levels of hierarchy). Ceo has low span of control (direct reports). Relatively low percentage of managers Organic structure (seehandout) Mass production/large batch. Companies that sell huge volumes of identical products (e. g. , cars, razor blades, aluminum cans, toasters). Make life-threatening use of automation and assembly lines.Typically, bigger than small b atch Taller hierarchies shadow level is huge (supervisor span of control is 48) Relatively greater number of managers (because hierarchy is so overblown) Mechanistic, bureaucratic structure Relatively cheap to operate Continuous Production. Primarily companies that refine liquids and powders (e. g. , chemical companies, oil refineries, bakeries, dairies, distilleries/breweries, electric actor plants). Machines do everything, domain just monitor the machines and plan changes. These organizations are tall and thin or even inverted pyramid almost cypher at the bottom At the very top there is an organic structure Lower levels more mechanistic, but because machines do everything, there is not much paper work, low level supervision, etc. Chick Perrow 67 looked at how the frequency and type of exceptions that occurred during production affected structure. Two types of exceptions (a) can be solved via orderly, analytic search process (like mechanic fixing car), (b) no analytic f ramework, rely on intuition, guesswork (like advertising, film-making, fusion research). Few Exceptions many another(prenominal) Exceptions Un-analyzable pottery, specialty glass, motel room artwork plumbing film making aerospace (non routine research) computer technical support (craftwork) tasks that no one really knows how to do work on routine work, but when problems crop up, it is hard intuition, inherent knowledge to fig what to do Analyzable routine, like screws (routine manufacturing) custom machinery, building dams (engineering the few problems that occur are usually easy to production) understand the act of well-known principles and technologies to lots of new and different situations It turns out that bottom odd organizations (analyzable and few exceptions) tend to be highly centralized and formalized in short, bureaucracies. Bureaucracies are the trump possible organizational form when the task is well-understood, and how to best execute it can be specified in advance.At the other extreme, the top right organizations (unanalyzable and many exceptions) are not well handled by bureaucracies. in that location are so many exceptions and new situations that having a set of formal procedures which specify how to handle every situation is out of the question. Organizations in this disaster tend to be highly decentralized and use informal elbow room of coordination and control. The reasons sport to do with human bounded rationality. (Bounded rationality refers to the fact that since humans have limited brain capacity, we cannot always find the absolute optimal solution to a given problem we only have the time and capacity to consider a few possible solutions, and choose the best among those. But we cant consider all possible solutions. Really complex systems are difficult to pre-plan there are too many contingencies. We simply cant figure it all out. Need to allow for real-time, flexible adjustment. Environment Adaptation O rganizations actively adapt to their environments. For example, organizations facing complex, highly uncertain environments typically differentiate so that distributively organizational unit is facing a smaller, more certain problem. for example, if Japanese tastes in cars are quite different from American tastes, it is really hard to make a single car that appeals to both markets. It is easier to create two separate business units, one that makes cars for the Japanese market, and the other that makes cars for the US market. Natural SelectionOrganizations whose structures are not fitted to the environment (which includes other organizations, communities, customers, governments, etc. ) will not perform well and will go. Most new organizations fail within the first few years. If the environment is stable, this selection process will lead to most organizations being well-adapted to the environment, not because they all changed themselves, but because those that were not well-adapted w ill have died off. Dependence The economy is a giant electronic network of organizations linked by buying and selling relationships. any company has suppliers (inputs) and customers (outputs). Every company is dependent on both their suppliers and their customers for resources and money.To the extent that a company needs its suppliers less than they need it, the company has power. That is, power is a office staff of asymmetric mutual dependence. Dependence is itself a function of the availability of secondary supply. A depends on B to the extent that there are few alternatives to B that are available to A. Dependence is also a function of how much A needs what B has got. If the Post Its company starts to piece of cake hardball with you, and there are no good alternatives, its still not a big deal because Post Its are just not that important. Organizations that have power over others are able to impose elements of structure on them.For example, GM is famous for imposing accounti ng systems, cost controls, manufacturing techniques on their suppliers. The sets of entities in an organizations environment that play a role in the organizations health and performance, or which are affected by the organization, are calledstakeholders. Stakeholders have interests in what the organization does, and may or may not have the power to influence the organization to protect their interests. Stakeholders are varied and their interests may coincide on some issues and not others. Therefore you find stakeholders both cooperating with apiece other in alliances, and competing with each(prenominal) other. pic Figure 1. Unconnected stakeholders.When stakeholders are unconnected to each other (as in Figure 1), the organization usually has an easier time of performing the different parties off one another. For example, it can represent its goals and needs differently to each stakeholder, without fear of being found out. Or, such competitive stakeholders into outbidding each other (e. g. , a university can tel one alumna that another alumnus is about to give a huge donation). Furthermore, when the stakeholders are unconnected, they cannot coordinate their efforts, and so have trouble controlling the organization. pic Figure 2. Well-connected stakeholders. In contrast, when the stakeholders are well-connected (as in Figure 2), the organization cannot represent itself differently to each one, or it will be found out.Furthermore, if the bonds among the stakeholders are closer than the bonds with the organization, the stakeholders may side with each other against the organization, and wont act in ways that negatively affect other stakeholders. Institutionalization Under conditions of uncertainty, organizations imitate others that appear to be successful. In other words, if nobody really knows what makes a movie successful, and then soulfulness has a blockbuster hit, everybody else copies the movie, and the organizational structure that produced the movie, hopi ng that they will get the same(p) results. This can cause whole industries to adopt similar structural features. one reason why this happens is the fear of litigation or simply blame.If some(prenominal) well-known, successful companies start adopting some new management style say, free teams and you dont because you know its not appropriate for your company, and then things start to go vilify for your company, people will say see? you should have adopted supreme teams. we told you so. So to avoid that, if the top companies in a field all adopt some new style, then all the others do to to avoid being blamed. In addition, diffusion of ideas due to personnel transfer and professional school training can create uniformity as well.RefOrganizational TheoryDeterminants of Structure Stephen P. Borgatti October 08, 2001 http//www. practical-management. com/Organization-Development/Organization-s-External-Environment. html