ORGANIZATIONAL STRUCTUREIntroductionOrganizations structures refers to organized systems and frameworks set up by organizations based on the functions of the organizations, duties of various employees, various organization’s segments in order to achieve the objectives, goals and visions of the organizations (Chritensen, 2007). Different organizations have different organization structures relative to objectives, thus influencing the processes under which organizations functions and operate (Siddiqui & S.D. M.P. , 2005). Departments are the basic outlines for organizations. They are created depending on the functions a department does, departments formed to serve and eliminate geographical barriers, departments that specialize in part or section of product and service production, and departments that are formed based on the types of customers the organization serves(Robbins, 1990). What determines organizational structures? Modern organizations are finding it hard to remain afloat by use of traditional vertical hierarchy organizational structures due organizational and business complexities due to rapid global changes in environmental, social, political, economical, legal and technological dynamic (Robbins, 1990).
Factors that determine what type of an organizational structure a firm should use as presented by theorists, can be as a result of contingency theories and principles and configuration perspectives and approaches (Hitt, et al 2009). Contingency- based determinant of organizational structures; Nature of business Contingency- based determinant of organizational structures is the nature of business.
This entails what type of business a firm deals with since different types of business have different objectives and satisfy different markets (Siddiqui & S.D. M.P. , 2005). For example, an IT firm, a consultancy firm, an agricultural inputs firm, an assembling firm, a beverage firm, all serves different customers and have different objectives thus they have different organization structures. The type of business and marketing strategiesThe type of business and marketing strategies that an organization decides to adapt influences organization structures it has (Hitt, et al 2009).
Business and marketing strategies may either be consumer oriented, profit oriented, or an organization may decide to rely on one or two of the marketing strategies to achieve their anticipated outcomes, which necessitates a change in its structures (Robbins, 1990). Marketing strategies include price, promotions, products, place and people. Absorption of technological tools and relationship of the organization with its environmentsThe rates at which an organization integrates and absorbs technological processes, products and effectively deals with its internal and external environments sometimes dictate their structure (Chritensen, 2007).
As organizations increasingly use technology, the structures becomes diverse due to increased capacity of production of goods and services caused by technology. Technologies more often than not simplify structural complexities especially when used in communication networks such as the internet, video and teleconferencing, storage and retrieval of data (Graubner, 2006). Technology has bridged geographical gaps that traditional were barriers to effective organizational structures for firms that operated overseas.
Organization structures based on internal environments ensures that employees are motivated, appreciated, are equipped with skills and understand which direction the firm is moving towards and work harder to ensure goals are achieved (Robbins, 1990). On the other hand, stakeholders agree on decisions and plans made. Structures based on external environments ensure that organization efficiently satisfy the market by understanding their needs, tastes and preferences, choices and behavior (Siddiqui & S.D. M.P. , 2005). Moreover, an organization is able to procure labor, deliver products and services promptly and effectively compete with other competitors to increase its market share.