Influence of Environment on Organizational Structure

Keywords: organizational composition impact

Organizational structure supplies the framework of a business and its pattern of management. The purpose of structure is department of work and co-ordination of activities among associates, so that they can achieve targets of the organization. The organizational structure directly establishes the formal order system and communication network, which not only influence the move of information and materials and utilization efficiency, but also have an effect on the subconscious and communal functions inside the business. Therefore, the correct organization structure is very crucial to effectively reach goals of the organization. In the following paragraphs, I will clarify the vital influences of technology and environment on the creation of organizational composition.

An organisational composition is a engineering which directs people through handling, co-ordinating and inspiration to complete organizational goals. Horizontal section of labour is related to specialization of the labour pressure. The vertical section of labour is associated with handling, monitoring, decision making and program of specialist distribution.

An corporation has various ways and styles to be organised, due to different goals and conditions. You will discover three opinions about which factor impacts variation of organization composition. The first argument towards environment condition, which is a very important constraint to select an effective structure form. The remaining factors which are considered to influence organizational constructions are technology and size.

Technology mainly refers to the process from type to outcome within the organization. The amount of certainty on specialized activities of the organization establishes different management and coordination requirements for the organizational framework. A high degree of certainty can fortify formalization and centralization of organizational framework. On the contrary, the framework of organization in this scenario will need greater versatility.

Technology is a change process of mechanism to complete its tasks in an company. A crucial issue in technology is getting together with an organizational customers' demand for output customization. The velocity of which products must be transformed is related to this. When the demand for product change or productivity customization is high, a stable organizational structure (for instance, machine bureaucracy) is incorrect for controlling the creation process. In order to efficiently gratify needs of customization and change, an adaptive composition (for example, organic and natural) works more effectively and advisable. For example, in the Microsoft, the development of new technology and product is a major quest in the fierce market competition. To achieve the goal, employees and departments need to pay more focus on market demand and other competitors. Therefore, flexible framework is essential to take effective procedures in terms of environmental changes.

If outputs are standardized, product life-cycles are long, and consumer exceptions are few, more bureaucratic or mechanistic structures will be suited. It is likely that organizations that are confronted with high requirements for output customization or change pay higher attention to effective problem handling, while organizations with relatively secure transformation technologies target more on the successful performance. As the work in organizations with boring systems is standardized, employees are likely to be required less training and education. Employees in firm with non-routine technologies need professional training and relevant work experience. In comparison to a worker in the set up line, a costume designer may be needed more professional knowledge and skill training.

Span of control refers to the number of subordinates supervised by way of a administrator or a supervisor. Period of control is also different in organizations with different kinds of technology. The more complex the technology, the more that the requirement of any supervisor for problem handling. However, it relies on professional employees in an company with non-routine technologies. Professional staffs have expert knowledge and personal experience that is capable of doing well without close guidance, so the period of control can be bigger. The course of control in organizations with non-routine technologies is smaller than that in organizations with boring technologies.

Centralization of decision making is also a persona of organizations with regular technologies. Furthermore, coordination and control are comprised in just a centralized management composition. The organization's activity is usually in the form of memos, studies and procedures when it's analyzable and the communication is repeated. On the contrary, if the duty is less analyzable, information is conveyed by social communication, for instance, telephone dialog and conferences. The range of decision making expert is lengthened in organizations with non-routine technology, so can be coordination and control activities.

Based on the relationship between technology and organizational composition, we can forecast whatever organizational structure is suitable for which form of technology. For instance, machine bureaucracies should only be applied to routine technologies. Organic structure is sufficient for other types of technologies, though it may work best with non-routine solutions.

There is a technological determinism which argues that technology is the primary force to ascertain jobs, behaviour, behaviours and organizational buildings. Joan Woodward, Wayne Thompson and Charles Perrow are the representative characters in this school.

Joan Woodward discovered that an organization framework was related to its performance through technology. She presumed that it was the complexness of technology driven which composition to be utilized. Woodward found out that as the technology became more complex, the length of the string demand would increase, so performed the proportion of managers altogether employment. Along with the increasing difficulty of technology, the management personnel's period of control enlarged.

James Thompson argues that organizational buildings are determined by the kind of coordination, which is indicated by interdependence between individuals, groupings and divisions. Different sorts of technology create different types of interdependence, so technology indirectly influences the organization framework. It's the pooled activity interdependence when the contributions created by individuals and departments are split and independent. When this happens, it is simple to judge the performance of every group member or department, so a bureaucratic business structure with low coordination costs is adapted. Long-linked technology is a technology that will require some responsibilities to be performed in a predetermined order. One department or an individual cannot perform before former has completed their responsibilities. It really is sequential activity interdependence when the performance of the team member or a department is difficult to be examined, so different divisions need to achieve a consensus through coordination and integration. For instance, in the circulation process of juice production, fruit juice needs to be processed before it can be packaged.

External environment factors, fads and innovations lead to change in internal company structure, procedures and behaviours. As the external environment is now more and more sophisticated, organizations have to adapt to the changes. The strategies an organization uses to manage its environment are reflected in the framework of the business. Organisational framework is not static, it'll change as the times progress and deviation of surroundings. For instance, in 2004, Motorola released reorganization in the platform of company, because the first deficit in the last three years occurred. Motorola attributed the losses to lessen demand for highpoint mobile phones and continuous decline of market prices. There were only two business departments in the firm after reorganization: research and development team and marketing division.

Organic framework and mechanistic are two patterns of organizational framework that may be created by environmental conditions. An organic structure is suited to a company controlled in a turbulent environment, while the organization with secure surroundings should make use of the mechanistic composition. As both of these structures work for different environment, so it is difficult to judge which is better.

To some extent, the success of an organization's operation depends upon its responds to environmental conditions. Environmental variability is the key element which is taken into account of decision creators. It refers to the degree of change in environmental activities relating to the operation of organizations. Mintzberg categorized environmental elements which are related to organizational construction into four areas, including steadiness, complexity, market variety, and hostility.

Differentiation is the process of dividing an organization into different departments and all of them is responsible for different types of duties. As differentiation allows employees to make more efficient response to the environment, many organizations increase their differentiation when their environment becomes more uncertain. However, high differentiation of departments may lead to problems in co-operation and aggravation of issues. To be able to prevent this from happening, organizations must strengthen co-ordination between different departments. It is the reason why the environment determinists think that the amount of environment uncertain established the organization framework.

Duncan produced the typology of organizational environments, which differs from the viewpoint that external surroundings determine internal buildings. He argues that organizational reaction made to environmentally friendly changes will depend on the managers' perception alternatively than objective observer's classification. If the manager havent realised that the surroundings is changing, he'll not provide a corresponding response. The inner structures and processes will transform with changes in our belief. Since different managers focus on different aspects of the environment, they get different information and make different decisions about organizational strategy and framework.


In conclusion, the selection of organizational structure is dependent essentially on the technology and environment it faces. Despite the fact that a great deal of modern theorists of technology do not consider that scientific determinism can be an accurate concept expressing the relationship between organization framework and technological improvements, it makes a substantial contribution to development of organizational theory. Organizational structure plays an important role in the procedure of organizations and development of organizational behaviour. The study of organization framework can help us understand how to establish successful and practical form of organizations.

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