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Factors To Consider In Designing It Organizations And It Infrastructure Pdf

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The Importance of Organizational Design and Structure

An organizational structure defines how activities such as task allocation , coordination, and supervision are directed toward the achievement of organizational aims. Organizational structure affects organizational action and provides the foundation on which standard operating procedures and routines rest.

It determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organization's actions.

Organizations are a variant of clustered entities. An organization can be structured in many different ways, depending on its objectives. The structure of an organization will determine the modes in which it operates and performs.

Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch , department , workgroup , and individual. Organizations need to be efficient, flexible, innovative and caring in order to achieve a sustainable competitive advantage.

Pre-bureaucratic entrepreneurial structures lack standardization of tasks. This structure is most common in smaller organizations and is best used to solve simple tasks, such as sales. The structure is totally centralized. The strategic leader makes all key decisions and most communication is done by one on one conversations. It is particularly useful for new entrepreneurial business as it enables the founder to control growth and development.

They are usually based on traditional domination or charismatic domination in the sense of Max Weber 's tripartite classification of authority. Weber , p.

Precision, speed, unambiguity, … strict subordination, reduction of friction and of material and personal costs- these are raised to the optimum point in the strictly bureaucratic administration. They are better suited for more complex or larger scale organizations, usually adopting a tall structure. The tension between bureaucratic structures and non-bureaucratic is echoed in Burns and Stalker's [7] distinction between mechanistic and organic structures.

Bureaucratic have many levels of management ranging from senior executives to regional managers, all the way to department store managers. Since there are many levels, decision-making authority has to pass through more layers than flatter organizations.

A bureaucratic organization has rigid and tight procedures, policies and constraints. This kind of structure is reluctant to adapt or change what they have been doing since the company started. Organizational charts exist for every department, and everyone understands who is in charge and what their responsibilities are for every situation. Decisions are made through an organizedaucratic structures, the authority is at the top and information is then flowed from top to bottom.

This causes for more rules and standards for the company which operational process is watched with close supervision. Some advantages for bureaucratic structures for top-level managers are they have a tremendous control over organizational structure decisions. This works best for managers who have a command and control style of managing. Strategic decision-making is also faster because there are fewer people it has to go through to approve.

This can make it hard for a company to adapt to changing conditions in the marketplace. The term of post bureaucratic is used in two senses in the organizational literature: one generic and one much more specific. This may include total quality management , culture management and matrix management , amongst others. None of these however has left behind the core tenets of Bureaucracy.

Hierarchies still exist, authority is still Weber's rational, legal type, and the organization is still rule bound. Heckscher, arguing along these lines, describes them as cleaned up bureaucracies, [9] rather than a fundamental shift away from bureaucracy. Gideon Kunda, in his classic study of culture management at 'Tech' argued that 'the essence of bureaucratic control - the formalization, codification and enforcement of rules and regulations - does not change in principle Another smaller group of theorists have developed the theory of the Post-Bureaucratic Organization.

Charles Heckscher has developed an ideal type, the post-bureaucratic organization, in which decisions are based on dialogue and consensus rather than authority and command, the organization is a network rather than a hierarchy, open at the boundaries in direct contrast to culture management ; there is an emphasis on meta-decision-making rules rather than decision-making rules. This sort of horizontal decision-making by consensus model is often used in housing cooperatives , other cooperatives and when running a non-profit or community organization.

It is used in order to encourage participation and help to empower people who normally experience oppression in groups. Still other theorists are developing a resurgence of interest in complexity theory and organizations , and have focused on how simple structures can be used to engender organizational adaptations. For instance, Miner et al. Their study makes links to simple structures and improviser learning. Other scholars such as Jan Rivkin and Sigglekow, [10] and Nelson Repenning [11] revive an older interest in how structure and strategy relate in dynamic environments.

A functional organizational structure is a structure that consists of activities such as coordination, supervision and task allocation. The organizational structure determines how the organization performs or operates. The term organizational structure refers to how the people in an organization are grouped and to whom they report.

One traditional way of organizing people is by function. Some common functions within an organization include production, marketing, human resources, and accounting. This organizing of specialization leads to operational efficiency, where employees become specialists within their own realm of expertise. On the other hand, the most typical problem with a functional organizational structure is that communication within the company can be rather rigid, making the organization slow and inflexible.

Therefore, lateral communication between functions becomes very important, so that information is disseminated not only vertically, but also horizontally within the organization. Communication in organizations with functional organizational structures can be rigid because of the standardized ways of operation and the high degree of formalization. As a whole, a functional organization is best suited as a producer of standardized goods and services at large volume and low cost. Coordination and specialization of tasks are centralized in a functional structure, which makes producing a limited number of products or services efficient and predictable.

Moreover, efficiency can further be realized as functional organizations integrate their activities vertically so that products are sold and distributed quickly and at low cost.

Even though functional units often perform with a high level of efficiency, their level of cooperation with each other is sometimes compromised. Such groups may have difficulty working well with each other as they may be territorial and unwilling to cooperate.

The occurrence of infighting among units may cause delays, reduced commitment due to competing interests, and wasted time, making projects fall behind schedule. This ultimately can bring down production levels overall, and the company-wide employee commitment toward meeting organizational goals.

The divisional structure or product structure consists of self-contained divisions. A division is a collection of functions which produce a product. It also utilizes a plan to compete and operate as a separate business or profit center. According to Zainbooks. Employees who are responsible for certain market services or types of products are placed in divisional structure in order to increase their flexibility.

Examples of divisions include regional a U. S Division and an EU division , consumer type a division for companies and one for households , and product type a division for trucks, another for SUVS, and another for cars.

The divisions may also have their own departments such as marketing, sales, and engineering. The advantage of divisional structure is that it uses delegated authority so the performance can be directly measured with each group. This results in managers performing better and high employee morale.

Also, a company will have a simpler process if they need to change the size of the business by either adding or removing divisions. When divisional structure is utilized more specialization can occur within the groups. When divisional structure is organized by product, the customer has their own advantages especially when only a few services or products are offered which differ greatly. When using divisional structures that are organized by either markets or geographic areas they generally have similar functions and are located in different regions or markets.

This allows business decisions and activities coordinated locally. The disadvantages of the divisional structure is that it can support unhealthy rivalries among divisions.

This type of structure may increase costs by requiring more qualified managers for each division. Also, there is usually an over-emphasis on divisional more than organizational goals which results in duplication of resources and efforts like staff services, facilities, and personnel.

The matrix structure groups employees by both function and product simultaneously. A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of the strengths, as well as make up for the weaknesses, of functional and decentralized forms.

An example would be a company that produces two products, "product a" and "product b". Using the matrix structure, this company would organize functions within the company as follows: "product a" sales department, "product a" customer service department, "product a" accounting, "product b" sales department, "product b" customer service department, "product b" accounting department.

There are advantages and disadvantages of the matrix structure. Some of the disadvantages include tendencies towards anarchy , power struggles and 'sinking' to group and division levels. This, in turn, can be confusing for employees to understand who is next in the chain of command.

An additional disadvantage of the matrix structure is higher manager to worker ratio that results in conflicting loyalties of employees. However, the matrix structure also has significant advantages that make it valuable for companies to use. The matrix structure may improve upon the "silo" critique of functional management in that it aims to diminish the vertical structure of functional and create a more horizontal structure which allows the spread of information across task boundaries to happen much quicker.

It aims to allow specialization to increase depth of knowledge and allows individuals to be chosen according to project needs. Starbucks is one of the numerous large organizations that successfully developed the matrix structure supporting their focused strategy.

Its design combines functional and product based divisions, with employees reporting to two heads. This structure can be seen as a complex form of the matrix, as it maintains coordination among products, functions and geographic areas.

With the growth of the internet, and the associated access that gives all levels of an organization to information and communication via digital means, power structures have begun to align more as a wirearchy , enabling the flow of power and authority to be based not on hierarchical levels, but on information, trust, credibility, and a focus on results.

In general, over the last decade, it has become increasingly clear that through the forces of globalization, competition and more demanding customers, the structure of many companies has become flatter, less hierarchical, more fluid and even virtual. The flat structure is common in small companies entrepreneurial start-ups, university spin offs.

As companies grow they tend to become more complex and hierarchical, which lead to an expanded structure, with more levels and departments. However, in rare cases, such as the examples of Valve , GitHub, Inc. All of the aforementioned organizations operate in the field of technology, which may be significant, as software developers are highly skilled professionals , much like lawyers.

Senior lawyers also enjoy a relatively high degree of autonomy within a typical law firm , which is typically structured as a partnership rather than a hierarchical bureaucracy. Some other types of professional organizations are also commonly structured as partnerships, such as accountancy companies and GP surgeries.

Organizational structure

Considerations of the external environment—including uncertainty, competition, and resources—are key in determining organizational design. Considerations of the external environment are a key aspect of organizational design. The environment in which an organization operates can be defined from a number of different angles, each of which generates different structural and design strategies to remain competitive. Complexity theory postulates that organizations must adapt to uncertainty in their environments. The complexity theory treats organizations and firms as collections of strategies and structures that interact to achieve the highest efficiency within a given environment. Therefore, companies in a highly uncertain environment must prioritize adaptability over a more rigid and functional strategy. Alternatively, a fixed and specific approach to organizational design will capture more value in a mature market, where variability and uncertainty are limited.

Metrics details. In the paper, we argue that designing organizations should be scientific-based and forward-looking. This raises challenges in designing organizations in contexts and situations that are new and have not been seen before. Experimentation of what is and what might be is the basis for exploring and examining what makes a good science for organizational design. Experimentation permits us to examine what might be for organization designs, which are not well understood or may not exist yet.

An organizational structure defines how activities such as task allocation , coordination, and supervision are directed toward the achievement of organizational aims. Organizational structure affects organizational action and provides the foundation on which standard operating procedures and routines rest. It determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organization's actions. Organizations are a variant of clustered entities. An organization can be structured in many different ways, depending on its objectives.

Acquiring information systems and services

One of the wonderful things about being a coach is that I meet hundreds of executives who freely share their business and leadership challenges with me. As well as helping me understand how hard it is to run an organization, they show me how they are managing to adapt — or not — to changing […]. As well as helping me understand how hard it is to run an organization, they show me how they are managing to adapt — or not — to changing organizational structures.

Information systems are a major corporate asset, with respect both to the benefits they provide and to their high costs. Therefore, organizations have to plan for the long term when acquiring information systems and services that will support business initiatives. At the same time, firms have to be responsive to emerging opportunities.

Organization structure generally refers to the way in which a business or similar organization arranges its tasks, people and techniques. A properly organized organizational structure will help provide transparency within the organization, ensuring the complete and timely disclosure of information. The main factors to consider when designing an organizational structure include clarity, understanding, decentralization, stability and adaptability. Maintaining clarity within an organization means that employees have a completely clear picture of all aspects of their jobs.

Factors to Consider when Designing an Organization Structure

5 Contingency Factors Affecting Organisational Design

The contingency factors to be studied are briefly discussed in the following paragraphs:. Managers having the responsibility for organisational design, study the contingency factors that affect organisational design and then design a structure to fit these contingency factors. Logically structure follows strategy because organisational structures are built to achieve objectives by implementing the strategies. When strategy changes, structures must change. Environment has an impact on decision making — specifically the difficulty of making decisions in an uncertain or unpredictable environment.

Creating a new organizational structure is one of the toughest—and most politically explosive—challenges that an executive faces. Here are nine tests to guide the way. Organizational structures rarely result from systematic, methodical planning. Rather, they evolve over time, in fits and starts, shaped more by politics than by policies. The haphazard nature of the resulting structures is a source of constant frustration to senior executives. Strategic initiatives stall or go astray because responsibilities are fragmented or unclear.


Technology is an important factor to consider in organizational design. Modern organizations can be treated as complex and adaptive systems that include a mix of.


Organizational size. The larger an organization becomes, the more complicated its structure. In reality, if the organization is very small, it may not even have a formal structure. Rules and guidelines are not prevalent and may exist only to provide the parameters within which organizational members can make decisions. Small organizations are very often organic systems.

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