ORGANIZATIONAL STRUCTURES 4
Organizationalstructure refers to how jobs and tasks are grouped, divided andcoordinated. Different organizations use various structures becauseof diverse factors (Lavie,Haunschild & Khanna, 2012).In most cases, different structures exist because of four reasonsthat include strategy, organizational size, technology, and theenvironment.
Theorganizational structure allows an entity and its management torealize or attain its objectives. The goals of an organization arealigned with its overall strategy. A firm’s strategy has three maindimensions that include cost reduction, imitations, and innovation(Lavie, Haunschild & Khanna, 2012).Therefore, using different tactics enables a firm to produce theprojected outputs. Consequently, each organization uses differentstrategies.
Organizationalstructure is influenced by the scope of an organization. Forexample, large organizations, especially multinationals, tend to haveincreased specialization, departmentalization, decentralization, andvertical integration. By implementing the different structures, theycan achieve coordination across the board(Stark, 2015).Conversely, small organizations, especially those with less than 200employees, have structures with attributes such as minimalspecialization, high formalization, a chain of command, and reduceddepartmentalization.
Technologyrefers to how an organization transforms its input into output usingprocesses, human resources, and raw materials. Every organizationhas at least one form of technology that it uses to convert thefinancial, natural capital and human expertise into products andservices to meet the market demands(Lavie, Haunschild & Khanna, 2012). Due to the need to adapt different technologies, variousorganizations employ different structures.
Anorganization’s environment consists of factors, both external andinternal, that impact or have the potential to affect its operationsand performance(Stark, 2015).Therefore, because of the diverse environments, businesses have touse different structures to remain competitive.
Theabove discussion underscores the fact that organizational structuresdiffer because of the business environment, strategy, technology, andorganizational size. In conclusion, it is essential for firms toselect a structure using the above requirements.
Lavie,D, Haunschild, P & Khanna, P. (2012). Organizational differences,relational
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Stark,J. (2015). Productlifecycle management. In ProductLifecycle Management.Springer International Publishing.