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Understanding Organization Structures: Strategies, Size, Technology, Environment

Explore how strategies, size, technology, and environment impact organizational structures for optimal outcomes in employee behavior and performance.

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Understanding Organization Structures: Strategies, Size, Technology, Environment

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  1. Organizational Behavior Presented To: Sir Tisman Pasha Presented By: Khurram Shahzad Roll# : 07-32

  2. Foundations Of Organization Structure CH#16

  3. Contents • Why Do Structures Differ? • Organizational Designs and Employee Behavior • Organization Structure: Its Determinants and Outcomes

  4. Why Do Structures Differ?

  5. Why Do Structures Differ? • Mechanistic Model: • A structure characterized by: • Extensive departmentalization • High formalization • Centralization • Restricted Information Flow

  6. Why Do Structures Differ? Organic Model: A structure characterized by: • Flat • cross-functional teams • has low formalization • Relies on participative decision making • Free Flow of information

  7. Mechanistic Versus Organic Models

  8. Factors Causes The Organization’s Structure Differ • Strategy • Organization Size • Technology • Environment

  9. 1- Organization Strategy • Organization goals are achieved by Strategies • Strategy and Structure should be closely linked • Structure must follow Strategy • Change in Organization’s Strategy should be reflected changes in it’s Structure to support this change

  10. Strategy Framework Dimensions 1- Innovation Strategy:A strategy that emphasizes the introduction of major new products and services. e.g. Apple 2- Cost-minimization Strategy:A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting. e.g. Wal-Mart 3- Imitation Strategy:A strategy that seeks to move into new products or new markets only after their viability has already been proven. e.g. HP

  11. The Strategy-Structure Relationship Strategy Structural Option Innovation Organic:A loose structure; low specialization, low formalization, decentralized Cost minimizationMechanistic:Tight control; extensive work specialization, high formalization, high centralization Imitation Mechanistic and organic: Mix of loose with tight properties; tight controls over current activities and looser controls for new undertakings

  12. 2- Organization SIZE • Organization’s Size Significantly affects it’s structure • Organizations with 2000 and more employees are Called Large Organizations • Increasing Employees does not affect the larger organizations • But Increasing Employees can affect the shifting of structure for Small Organizations

  13. Why Do Structures Differ? – Size “As an organization grows larger, it becomes more mechanistic.” Characteristics of large organizations: • More specialization • More Departmentalization • More hierarchal structure • More rules and regulations than Smaller organization

  14. 3- Organization Technology Technology: “How an organization transfers its inputs into outputs.” • Every Organization has at-least one technology for converting Financial, Human and physical resources into products and services. Examples: • Ford Motors uses “Assembly-line process” for it’s products • Universities normally uses “Formal lecture method”

  15. Characteristics of Routine and Non-Routine Technologies • Routine technologies are associated with long, departmentalized structures and formalization in organizations. • Routine technologies leads to centralization when formalization is low. • Non-routine technologies are associated with delegated decision authority.

  16. 4- Organization Environment “Institutions or forces outside the organization that potentially affect the organization’s performance.” • Organization’s structure is affected by it’s environment due to environmental uncertainty. • Organization’s Having static environment are less affected by environment. • Organization’s Having Dynamic environment are more affected by environment.

  17. The Three Dimensional Model of the Environment Key Dimensions: • 1- Capacity: the degree to which an environment can support growth. • 2- Volatility: the degree of instability in the environment. • 3- Complexity: The degree of heterogeneity and concentration among environmental elements.

  18. Cont…….. Volatility Capacity Complexity

  19. Organizational Designs And Employee Behavior

  20. Organizational Designs & Employee Behavior Research Findings: • Work specialization contributes to higher employee productivity, but it reduces job satisfaction. • The benefits of specialization have decreased rapidly as employees seek more intrinsically rewarding jobs. • The effect of span of control on employee performance is contingent upon individual differences and abilities, task structures, and other organizational factors. • Participative decision making in decentralized Organizations is positively related to job satisfaction.

  21. Organization Structure:Its Determinants and Outcomes

  22. Organization Structure: Its Determinants and Outcomes

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