[Solution] Organization Design
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Author: Emily Carter
Situational Influences on Organization Design
Models of organization design based on universal perspectives on management assume that one design is best for all organizations. A situational view of organization design, on the other hand, assumes that the best design for a particular organization depends on its circumstances, including its technology, environment, size, place in the organizational life cycle, and strategy.
Core Technology
Technology consists of the conversion processes used to transform inputs into outputs. Examples of technology include machinery used to make products and processes that enable transactions with customers. An organization's core technology is its most important technology.
Joan Woodward identified three basic forms of technology:
- Unit or small-batch technology is used to make products that are customized for a single customer or are produced in small quantities. For example, in contrast to textbooks, which are written, printed, and sold to be used by students in many schools, yearbooks are made in small, custom batches for the students attending a particular school that year.
- Large-batch or mass-production technology is used to assemble components into another part or a finished product. Appliances and automobiles are made this way.
- Continuous-process technology is used to turn raw materials into finished products through a series of transformations. An example would be the transformation of corn into high-fructose corn syrup through a multistep process that includes the application of acids and enzymes.
Situational Design Factors
Technology
- Unit/small-batch
- Mass production
- Continuous process
Environment
- Stable
- Dynamic
- Complex
Size
- Small
- Medium
- Large
Life Cycle
- Birth
- Youth
- Midlife
- Maturity
Select the term that best completes the following sentence about Joan Woodward's basic forms of technology.
An organization that makes a low volume of customized products is using technology.
View Explanation
Organizations that make products or services that are customized for various customers and thus produced in small quantities are using small-batch technology (also called unit technology).
Select the correct response to the following question.
If an organization's environment is very stable, which type of organization design is likely to be most beneficial?
- Organic
- Mechanistic
- Mature
View Explanation
Keeping in mind that the best design for an organization depends on many factors, an organization in a stable environment can usually function best by establishing a clear set of rules and procedures, or as a mechanistic organization. This is similar to Weber's bureaucratic organization or Likert's System 1 organization.
Organic organizations tend to do best in unpredictable environments. The term mature refers to a stage in the organization life cycle and is not a type of organization design.
In contrast to a small organization, a large organization is likely to make which of the following design choices? Check all that apply.
- More decentralization of decision making
- More bureaucratic elements
- Greater degree of job specialization
- More standard operating procedures and rules
View Explanation
To work in a coordinated yet efficient way, large organizations tend to have higher levels of job specialization and more standard operating procedures, rules, and regulations. They also tend to decentralize decision making, because requiring employees to bring all problems to a central decision maker would be far too cumbersome.
The high degree of job specialization and large number of rules are typical of a bureaucratic design, but decentralized decision making is not. The choice of how closely to follow a bureaucratic model or a behavioral model is not strongly influenced by organizational size.
Organizations can be thought of as proceeding through a four-stage life cycle. Which of the following tend to happen as an organization moves from less mature to more mature? Check all that apply.
- Jobs become more specialized.
- The organization becomes more mechanistic.
- The staff component of management becomes smaller.
- Fewer resources are invested in planning.
View Explanation
One model for organizational development proposes a four-stage life cycle: birth, youth, midlife, maturity. As organizations move through this cycle, they tend to:
- Become bigger and more geographically dispersed
- Become more mechanistic, more decentralized, and more specialized
- Invest more resources in planning, coordination, and control systems
- Make a larger proportion of management positions staff jobs
- Formalize lines of authority
