Factors that Affect the Design of an Organization’s Structure (Thesis Sample)
Factors Affecting the Design of an Organisation’s Structuresource..
Task 1: Factors that Affect the Design of an Organisation’s Structure
Historical Trends in Organisational Structure
Organizational Framework Reengineering
All companies must reassess their activities daily. It involves measuring the corporate structure's efficacy. Companies are gradually looking to reengineering—the total overhaul of corporate systems and procedures to optimize operations—to face the daunting demands of the future. “Starting over” is a more straightforward concept of reengineering (Burton et al., 2020). In essence, top management poses the question, “How would we operate this company if we were a startup?" Reengineering aims to recognize and discard outdated laws and fundamental principles that currently govern business activities. Many informal and formal enterprise guidelines are focused on obsolete ideas regarding technologies, employees, and organizational priorities (Zaini & Saad, 2019). Reengineering aims to increase cost management, product consistency, customer care, and pace by reinventing business operations (Hernaus, 2011). The reengineering process may contribute to a more robust and efficient organizational structure best adapted to the industry's current (and prospective) competitive climate.
Organizations are scrambling to build modern operational models that will allow them to convert digital technologies into a strategic advantage (Introna & Petrakaki, 2007). The virtual business, which is a network of individual businesses (suppliers, consumers, and even competitors) connected by information technology to exchange expertise, costs, and access to one another's markets, is one option that is becoming increasingly popular (Hernaus, 2011). This network arrangement helps enterprises to communicate efficiently in order to take advantage of constantly evolving opportunities. Each business that joins with others to construct a virtual organization is boiled down to its core in the most basic form of the idea. The virtual enterprise should ideally have no central office, no organizational map, no structure, and no vertical integration (Daihani, 2017). It only applies its competitive advantages, or primary skills, to a coalition. It combines its strengths with the critical competencies of other businesses and entrepreneurs.
Companies are constantly focusing their organizational structures on delivering results that are beneficial to their clients. Marketing teams define product attributes and qualities that fulfill consumer demands and push their companies to meet those needs (Markgraf, n.d). One will move the company's emphasis to a consumer-centered one by ensuring that everybody in the organization knows what their customer needs are, how the standards of providing value to the customer influence each role, and what every worker should do to produce happier customers. Companies that leverage their customer focus to win market share gain a strategic edge by adapting to this pattern.
Organizational structure has been impacted by cost-cutting movements, with the movement to remove inefficient layers of administration and embrace flat organizations with minor reporting levels. Since more independent workers need less supervision, this pattern favors worker empowerment (Frank et al., 2019). Ask which management layers contribute positively, whether in terms of improved revenue or for the client, to flatten the company. Some businesses have structured themselves into teams of workers who carry out the job and directly report to upper management. Many firms have not adopted the pattern to that point, opting instead to have a hierarchical system with fewer tiers.
Variables that Affect the Nature of Organizational Structures
Size of the Company
The more a corporation expands, the more complex its framework gets. A small business, such as a single retail shop, a two-person consultancy company, or a restaurant, may have a basic framework. If the business is tiny, it does not have a structured structure at all. Individuals execute roles based on their interests, dislikes, desires, and needs, rather than fulfilling an organizational map or specific job functions (Simonian et al., 2010). There are few laws and standards, and those that do remain can only operate to include the criteria under which corporate representatives may make decisions. Small businesses are frequently organic systems.
However, as a company expands, it becomes more complicated to handle without more organized job tasks and power delegation. As a consequence, significant companies build formal systems. Tasks are incredibly specialized, and specific rules and instructions govern job processes. Interorganizational contact is directed mainly from a superior to a subordinate, and hierarchical partnerships are the bedrock of power, duty, and regulation (Billinger & Workiewicz, 2019). The form of arrangement that emerges would allow the organization to function efficiently. Larger organizations are often mechanistic since mechanistic processes are often built to optimize productivity and increase performance.
The Life Cycle of an Organization
Organizations, including humans, go through what is known as a life cycle. Most businesses go through the same four stages as people: middle age, youth, maturity, birth. Each stage has its characteristics that have an impact on the organization's structure. In its youth, a company is only getting underway. A bureaucratic structure is lacking in an organization that is still in its infancy. In a young company, there is no power transfer. The owner, in most cases, is the one who "makes the decisions." The corporation is also in its early stages and is seeking to grow in the youth stage. At this point, the focus is on expanding. The company emphasizes the owner's desires to the client's requirements (Hossain et al., 2018). The firm's structure becomes functional through this phase. Throughout this period, the administrative structure is created, and some control is transferred.
The midlife phase begins when a company has achieved a high level of success. A business becomes stronger in its older life with a more organized and formal system. The founder would find it challenging to maintain authority as the leadership structure becomes longer. The architecture becomes even more conceptual as the business gets older. As a business matures, it becomes less innovative, less engaged in the growth, and more involved with creating a stable and secure atmosphere. The emphasis is on increasing profitability and competition. Nonetheless, in order to boost competitiveness and long-term viability, a company's creativity fails. As a result of stale products, profits and profitability suffer (Burton & Obel, 2018). At this moment, businesses are on the verge of failing. Maturity, on the other hand, is not a prerequisite for success. Firms that are experiencing a maturity decline can be able to revive themselves by making the necessary changes.
This is the company's approach in how it places itself in the industry in terms of its goods. An organization can choose to be the first to launch the newest and latest item (differentiation strategy), or it can choose to manufacture an existing product more quickly and efficiently (cost leadership strategy). Any of these tactics necessitates a framework that aids the company in achieving its goals (Ahmady et al., 2016). To put it another way, the arrangement must be appropriate for the technique. Organic processes enable firms to respond quickly to changes. Hence, organizations that want to be the first to market for the newest and most innovative product are apt to be organic. Mechanistic companies seek to generate the same product more efficiently and effectively.
The context relates to the framework in which the organization exists, and it includes financial, legal, physical, cultural, technological, political, and natural context variables that influence the business. Situations are sometimes defined using the terms "strong" and "dynamic." In a stable condition, customers' tastes are well-known and are expected to remain stagnant for a while (Ifedi, 2020). Companies that manufacture household things like detergent, washing supplies, and paper products are indicators of enterprises that work in comparatively healthy environments (Tsuja & Mariño, 2013). In a dynamic planet, which is the complete opposite of a stable climate, customers' perceptions change regularly.
The term "turbulent" is widely used to describe this condition. In addition, the equipment used by a company in this area may have to be established and updated frequently. Electronics is an example of a company that flourishes in a constantly evolving setting. All electronics firms experience industry challenges, and consumer preferences change in tandem with technical advances (Boselie et al., 2021). Overall, mechanical systems are beneficial to organizations that work in predictable external conditions. This method offers a degree of reliability that helps companies with comparatively stable functioning conditions improve their long-term success. Companies that function in dynamic and constantly evolving conditions, on the other hand, are most likely to gain from an organic framework (Eruemegbe, 2015). This arrangement enables the company to adapt more quickly to changes in the market.