External Factors Affecting Organizational Structure

surround The surround is the world in which the organization operates, and includes conditions that mildew the organization such(prenominal) as economic, social-cultural, legal-political, technological, and natural milieu conditions. Environments argon often described as all st commensurate or dynamic. ? Stable environment customers desires are well understood remains consistent for a relatively long time Examples of organizations that face relatively stable environments include manufacturers of staple items such as detergent, cleaning supplies, and paper products. mechanistic social systems to be advantageous This system provides a level of efficiency that enhances the long-run performances of organizations that enjoy relatively stable operating environments ? Dynamic environment Customers desires are continuously changingthe arctic of a stable environment This condition is often thought of as turbulent the technology that a connection uses while in this environment m ay need to be continuously improved and updated An practice session of an industry functioning in a dynamic environment is electronics.Technology spays become competitive pressures for all electronics industries, because as technology changes, so do the desires of consumers. organic structure provides the greatest benefits This structure allows the organization to respond to environment change to a greater extent proactively. Organizations are at present increasingly designed to be more organic now days. The HR Organizational building has to fit to bleak challenges born in the external environment. All the authorized and influencing people speak about(predicate) the changes in the business world, as the current recession seems to be adept of the worst recessions ever.The counseling the business was done will be discontinued and youthful business moral philosophy and modernistic business rules will be born. In Recession for example HRM Organizational Structure should be as conciliatory as possible, the HRM Employees should be really aware of the needs of the organization and they should be able to help the organization to survive the recession victoriously. 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 presumable to survive the crisis, and even to prosper.McKinsey-2009 Technology Advances in technology are the to the highest degree 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 accomplished 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 lodge has the appropriate organizational structure blended with the right technology, it piece of tail attain organiza tional success.Joan Woodward found that the right combination of structure and technology were critical to organizational success. In her book Industrial Organization Theory and Practice (1965), the English management scholar classified threesome categories of core-manufacturing technology ? Small-batch output signal Used to manufacture a variety of custom, do-to-order goods. Each item is made somewhat differently to meet a customers specifications by the skills of the workers who work together in weensy groups. A print shop is an example of a business that uses small-batch production. Appropriate structure for this type is deconcentrate and flexible It works well in organic structure ? Mass production Automated machines are use that is programmed to make advanced volumes of standard products. Its used to create a large number of homogeneous goods in an assembly-line system. Workers are highly dependent on one a nonher, as the product passes from play to stage until c ompletion. Equipment may be sophisticated, and workers often follow detailed instructions while performing simplified jobs. Example-A caller that bottles soda pop It works well in rigid structure as has routine tasks baronial structure or mechanistic structures is the best choice for workers who must perform repetitive tasks. ? perpetual-process production stimulate goods by continuously feeding raw materials, such as liquid, solids, and gases, through a highly machine-driven system. Such systems are equipment intensive, only when freighter 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 right away to unexpected problems. It works well in organic structures The early(a) Technology factor that determines organizational structure is- ?IT-Knowledge management the sharing and integrating expertise within and between functions and portions through real time interrelated IT that allows for new kinds of task and reporting relationships. CITATION 1. (CliffsNotes. com. Factors Affecting Organizational Design. 29 Oct 2010 . Read morehttp//www. cliffsnotes. om/WileyCDA/study_guide/Factors-Affecting-Organizational-Design. topicArticleId-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 check processing at a bank. This activity is usually performed by a business unit that is highly formalise, has a great serve of specialization and division of labor, and high centralization of decision-making.In contrast, the creative section of an ad agency is usually not formalized at all, the division of labor is often blurry, and it is highly decentralized. It appears that certain activities naturally go with certain structures. Joan Woodward found that by subtle 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 grammatical construction, aircraft manufacture, furniture maker, tailors, printers of engraved wedding invitation, surgical teams). In these companies, typically, peoples skills and knowledge is more of the essence(predicate) than the the machines used. relatively expensive to operate work process is unpredictable, hard to pre-program or automate. Flat organization (few levels of hierarchy). chief executive pipicer 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 heavy use of mechanization and assembly lines.Typically, bigger than sma ll batch Taller hierarchies bottom level is huge (supervisor span of control is 48) Relatively greater number of managers (because hierarchy is so tall) 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 power plants). Machines do everything, reality just manage the machines and plan changes. These organizations are tall and thin or even inverted pyramid almost zero at the bottom At the very top on that point is an organic structure Lower levels more mechanistic, but because machines do everything, there is not much paper work, low level supervision, etc. dolly 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, uninflected search process (like mechanic fixing car), (b) no a nalytic framework, rely on intuition, guesswork (like advertising, film-making, coalition research). Few Exceptions Many Exceptions Un-analyzable pottery, specialty glass, motel room artwork plumbing film making aerospace (non routine research) computing machine 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, implicit knowledge to figure 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 application of well-known principles and technologies to lots of new and different situations It turns out that bottom left organizations (analyzable and few exceptions) tend to be highly centralized and formalized in short, bureaucracies. Bureaucracies are the best possible organizational form when the task is well-understood, and how to best execut e it can be specified in advance.At the other extreme, the top right organizations (unanalyzable and many exceptions) are not well handled by bureaucracies. There are so many exceptions and new situations that having a set of formal procedures which peg down how to handle every situation is out of the question. Organizations in this box tend to be highly decentralized and use informal means of coordination and control. The reasons have 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 presumption problem we only have the time and capacity to consider a few possible solutions, and recognize 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 Organiz ations actively adapt to their environments. For example, organizations facing complex, highly uncertain environments typically differentiate so that to each(prenominal) one organizational unit is facing a smaller, more certain problem. for example, if Japanese tastes in cars are preferably 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 fail. 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 we ll-adapted will have died off. Dependence The economy is a giant network of organizations linked by buying and selling relationships. Every play along 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 function of asymmetric mutual dependence. Dependence is itself a function of the availability of preference supply. A depends on B to the extent that there are few alternatives to B that are for sale to A. Dependence is also a function of how much A needs what B has got. If the Post Its company starts to play 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 implement elements of structure on them.For example, GM is famous for imposing accounting sys tems, 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 cast the organization to protect their interests. Stakeholders are varied and their interests may coincide on some issues and not others. indeed you find stakeholders both cooperating with each other in alliances, and competing with each other. pic inscribe 1. Unconnected stakeholders.When stakeholders are foreign to each other (as in Figure 1), the organization usually has an easier time of playing 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 alumnus 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 thus somebody has a smash hit hit, everybody else copies the movie, and the organizational structure that produced the movie, hoping that they will get the same resu lts. This can cause whole industries to adopt similar structural features. One reason why this happens is the fear of litigation or simply blame.If several well-known, successful companies start adopting some new management style say, main(a) teams and you dont because you know its not appropriate for your company, and then things start to go wrong for your company, people will say see? you should have adopted self-governing 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 exile 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