Factor for Organizational Design:
The contingency factors to be studied are briefly discussed in the following paragraphs: Managers having the responsibility for organisational design, study the contingency factors that affect organisational design and then design a structure to fit these contingency factors.
Logically structure follows strategy because organisational structures are built to achieve objectives by implementing the strategies. When strategy changes, structures must change. Environment has an impact on decision making — specifically the difficulty of making decisions in an uncertain or unpredictable environment.
Similarly, the stability and predictability of the environment have a direct bearing on the ability of the organisation to function effectively. An unstable environment that changes rapidly and is less predictable has two requirements: The organisation must be able to adapt to change, for which it needs to be flexible and responsive.
The organisation needs greater coordination among departments. The number of employers working in an organisation indicates its size.
It is observed that large organisations differ structurally from small ones in terms of division of labour, rules and regulations, performance appraisal and budgeting procedures.
With age; an organisation incorporates standardised systems, procedures and regulations. Like people, organisations evolve through stage of life cycle — birth, youth, midlife and maturity.
In the birth stage, the organisation created by the entrepreneur is informal, with no rules and regulations. Decision making is centralised with the owner and tasks are not specialised.
In the youth stage, the organisation is growing — it expands and hires more employees. It incorporates division of labour and formal rules and policies. Decision making is still with the owner although it is shared by few persons close to the owner.
In the midlife stage, the company has become quite large. It now has extensive sets of rules, regulations, policies and systems to guide the employees.
Control systems are used, professionals are hired, tasks are decentralised and authority is delegated to functional departments. In the maturity stage, rules, regulations, specialised staffs, budgets, a refined division of labour and control systems are in place. Some kind of technology is used to convert the resources into outputs in every organisation.
Technology includes the knowledge, machinery, work procedures, and materials that convert the inputs into outputs. The technology used to manufacture the products decides the kind of the organisation for the production system.Organizational design is the process of selecting and executing a business' structure.
This includes establishing a chain of command, determining organizational elements and allocating resources. Several factors influence organizational design decisions, including the size of the company, available technology, the.
Factors Affecting Organizational Design.
Although many things can affect the choice of an appropriate structure for an organization, the following five factors are the most common: size, life cycle, strategy, environment, and. technology. Organizational size.
Organizational Structure: Influencing Factors and Impact on a Firm. Quangyen Tran. 1,2, Yezhuang Tian factors on organizational structure is traditionally divided into two main factors. These factors which determine the it can design its struc- ture and encourage the development of cultural values.
Factors Affecting Organizational Design Although many things can affect the choice of an appropriate structure for an organization, the following f. However the main factors affecting organizational design are: size, environment, strategy, and technology.
Organizational design is the process of deciding on and executing a business’ structure. Organizational design is the process of deciding on and executing a business’ structure. Factors Affecting Organizational Design Although many things can affect the choice of an appropriate structure for an organization, the following five factors are the most common: size, life cycle, strategy, environment, and technology.
Organizational size The larger an organization becomes, the more complicated its structure.