As discussed in the aforementioned paragraphs, strategy can have an important effect on the kind of organizational structure a manager wishes to pursue. For instance if an organization focuses on the differentiation strategy, it will be necessary to empower the employees, to take risks, to develop and build their ideas and later to implement them. In such an organization, a formal hierarchy may not function in favor of the organization and rather function against it. Thus flexibility will be the key to success in such an organization.
Technology is the combination of skills, knowledge, tools, machines and equipments that are used that are used in the design and production of goods and services. Generally speaking, the more complicated an organization’s structure, the more difficult it would be to impose a rigid structure and build up on it. In such circumstances it would be necessary to give the technical staff and employees enough space and room to explore and build up on their technical skills. As far as human resources are concerned, the more well qualified a staff is and the more highly skilled employees, the probability of working in groups scales up in such circumstances. It would be thus necessary to pursue a decentralized strategy in such an organization and empower the employees to build and implement their pool of ideas.(Porter, 1990)
Thus the attributes mentioned above such as technology, human resources, organizational environment, business strategy are important ingredients to determining what a successful and an appropriate organizational structure could be. The first step in deciding the organizational structure is to grouping tasks into jobs. This is followed by grouping jobs into functions, functions into divisions and later divisions into appropriate structures. The structures themselves grow as the organizations and are divided accordingly by the managers. (Jones G. , 1995)
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