Determinants Of Organizational Structure

A number of factors determine how organizations are organised. These include the organization’s goals, social customs and mores, the ideals and beliefs of the founders or managers, environmental constraints, and available technology. As mentioned earlier, size, though an element of structure, is a determinant because it influences the rest of the elements also.

Organizational goals clearly influence the way an organization was created. The quality value placed on productivity and quality as well as shareholder value got a major impact on the redesign of Westinghouse as a far more diversified and decentralized company. Indeed, goals will be the prime determinants of framework. If the first is in the business of producing hamburgers, the goal of delivering a gourmet product at a moderate price leads to different structuring preparations than does the goal of delivering a reliable product quickly at a minimal price.

Social customs at the time of an organization’s birth also determine how it is organised. It has been very important in the annals of business. For example, the organizational forms adopted by the first companies in the automobile industry are not the same as the structures being adopted now. Historically production was organized round the assembly range.

Some workers always built chassis, which were sent down the assembly line to other workers then, who did such careers as putting axles and engines onto those framework. Currently, many automakers are adopting the work-group or team concept when a group of workers is responsible for more than simply one portion of the car.

At enough time the auto industry began, no one thought about using a combined group approach to building cars, given that it had not been consistent with the prevailing values about production. Structures become common in an industry Once, they usually do not change. Certain social buildings remain long after they are longer suitable for situations no.

For example, the railroad industry in the United States developed a structure that became dysfunctional as the engineering technology on the market advanced. The propensity to stick with industry-specific structures may be changing with the proliferation of mergers and acquisitions and a lot more rapid advancements in engineering technology. These developments may lead to the increased homogenization of framework as companies struggle to handle common problems of size.

Alternatively, the need for structural change could become apparent more due to technical advancement quickly. Another determinant of structure is made up of the beliefs and values of the individuals forming the business. Many firms in the computer industry, formed by young entrepreneurs who favor informal life-styles, have loose, informal, and collegial structures that reflect those values.

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Alfred P. Sloan put his personal stamp on the business of General Motors in the 1920s, and it was not before turbulent days of the 1970s that significant changes were made. Interestingly, these changes were brought about mainly as a response to the environment. Environmental constraints include legislation, government regulation, court orders, market characteristics, social issues, and societal norms.

For example, major incursions by Japanese car manufacturers in to the U.S. American companies to improve their creation methods as well as the root structures of their organizations. Laws concerning access into or exclusion from certain businesses, the imposition or removal of rules, and such court-ordered actions as the separation of American Telegraph and Telephone Company have an effect on the structure of organizations. The birth of individuals Express and other airline carriers was the direct result of the Airline Deregulations Act of 1978, which enabled new carriers to enter the airline business for the very first time in decades.

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