What are the four primary factors that affect the choice of an organizational structure?
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Ready to get started ? Talk to us todayQuick EnquiryBy completing this form a personal advisor will call you to answer your questions and guide you through the application process. Al Taawun Campus Al Zahia Campus London, UK Office For some businesses, organizational structure isn't an issue. A sole proprietorship with no employees doesn't have to worry about departmental coordination or the chain of command. Other businesses find the right structure as vital to success as the right leadership. Size and TimeSize is one of the major factors influencing organizational structure. In a partnership, or a business with three or four employees, everyone may know their role. Employees with specific skills may handle those jobs, or employees may switch around, tackling whatever needs doing. The bigger the organization grows, the less practical this kind of improvisation becomes. A hundred employees will probably find it hard to operate without an organizational structure. For a thousand or 10,000, it becomes impossible. Many businesses start small and become more complex as time passes, adding departments, employees and product lines. Entrepreneurs need to keep track of their company's growth and change the original structure if it no longer works. Legal Factors Affecting Organizational DesignState and federal laws influence organizational structure. If you want to incorporate, for example, you have to meet your state's legal requirements: a formal charter, a board of directors and bylaws. Or consider partnerships. In a general partnership, the partners share responsibility and authority equally. In a limited partnership, one partner puts up money but has little control over managing the business. Whichever approach you choose for your business, your structure then has to comply with the relevant laws Once you choose a legal form, it becomes a factor affecting organizational behavior. A C corporation has to have annual stockholder meetings, for instance. If you put up money as a limited partner, the structure shuts you out of controlling business operations. Leaders and FollowersThe factors influencing organizational structure include the leaders' vision for how they want to run the company and direct their followers. Two extreme and opposite approaches are the hierarchical structure and the flat structure. The hierarchical structure is one most of us have encountered: leader at the top with several layers of management under them, employees at the bottom. In the flat structure, the hierarchy goes away, with no layers between top leaders and front-line staff. Both structures have pros and cons.
Formal and Informal StructuresThe formal structure you establish for your business probably isn't the only structure in play. Whenever people gather together, informal structures crop up based on the needs of the group, rather than just the will of the leader.
Informal structure can be a positive factor affecting organizational behavior because it builds camaraderie and teamwork. The downside is that informal leaders may have won their influence through bullying and backstabbing other employees, which hurts the organization's interests. Business EnvironmentOrganizations don't exist in a vacuum. The environment around the company is another of the factors influencing organizational structure. Some companies operate in stable, settled markets, selling products such as copier paper or household cleaners that don't change much over time. A hierarchical, tightly structured organization can work well in this situation, as the company doesn't have to adapt to much change. Tech companies, on the other hand, operate in an industry that's constantly changing. To succeed they need an organizational structure that allows them to adapt and change fast. What are the 4 common elements of an organization's structure?Edgar Schein, a prominent organizational psychologist, identified four key elements of an organization's structure: common purpose, coordinated effort, division of labor, and hierarchy of authority.
What are the factors that affect organization?The economy, politics, competitors, customers, and even the weather are all uncontrollable factors that can influence an organization's performance. This is in comparison to internal factors such as staff, company culture, processes, and finances, which all seem within your grasp.
What are the 5 main organizational factors?Organizational influences are divided into five groups, which are organizational cultures and styles, organizational communication, organizational structures, organizational process assets and enterprise environmental factors (PMI, 2013).
What are some important factors to consider when choosing an organizational type?The following are some of the important factors business owners should consider when selecting a form of ownership.. Cost of Start-up. ... . Control vs. ... . Profits—to Share or Not to Share. ... . Taxation. ... . Entrepreneurial Ability. ... . Risk Tolerance. ... . Financing. ... . Continuity and Transferability.. |