Determinants of Organizational Structure

With the help of Prof. (Mrs.) Merlyn Michael D'souza all the IESMCRC (HR students) got an exposure over different organizational structures and its various determinants.

The objective here is to understand why organizations have the structure that they do. By "structure" it means, things like degree and type of horizontal differentiation, vertical differentiation, mechanisms of coordination and control, formalization, and centralization of power.

Following are the points which were being discussed in the classroom.

DETERMINANTS OF ORGANIZATION STRUCTURE:

There are six major determinants of Organization Structure. The six determinants are −

• Strategy
• Size
• Environment
• Technology
• Power-control 
• Culture

An organization consists of people with different traits, personality, skills, qualities, interests, background, beliefs, values and intelligence. In order to maintain a healthy environment, all the employees should be treated equally and be judged according to their work and other aspects that affects the firm.

Structure is the layout design of an organization. It is the construction and arrangement of relationships, strategies according to the organizational goal.

Technology can be defined as the implementation of scientific knowledge for practical usage. It also provides the resources required by the people that affect their work and task performance in the right direction.

This lecture was based on 'Environment' as a determinant of structure. All companies function within a given internal and external environment. Internal environment can be defined as the conditions, factors, and elements within an enterprise that influences the activities, choices made by the firm, and especially the behavior of the employees. While external environment can be defined as outside factors that affect the company's ability to operate. Some of them can be manipulated by the company’s marketing, while others require the company to make adjustments.

Some examples of internal environment include employee morale, culture changes, financial changes or issues, and some examples of external environment include political factors, changes to the economy and the company itself.

Further, other than this, few other things related to environmental factors were studied, which are stated below:

1. Environmental Uncertainty
2. Burns & Stalker studies on organization structures which states The theorists argued that organizations need different kinds of structure to control their activities that will allow the company to adapt and react to changes and uncertainties in the environment. 
3. The Emery-Trist levels of organizational environments include four main organizational types: The placid, randomized environment; the placid, clustered environment; the disturbed, reactive environment; and the turbulent field environment.
4. Lawrence and Lorsch develop an open systems theory of how organizations and organizational sub-units adapt to best meet the demands of their immediate environment. 

Strategies to lessen environmental uncertainty

INTERNAL

• Domain choice
• Recruitment
• Environmental scanning
• Buffering
• Smoothing
• Rationing
• Geographic dispersion

EXTERNAL

• Advertising
• Contracting
• Coopting
• Coalescing
• Lobbying

At the end of the session, there was an activity which was done by all the students related to the determinants in which we were divided into 2 groups.

We had to select any organization of choice, where we need to define whether the organization is of general environment or specific environment.

Further, we had to discuss whether the structure is mechanistic or not and which one is better for that organization.

Great learning and activity!!