Question

In: Finance

Explain briefly the determinants of organizational structure. Why do we need to consider those factors?

Explain briefly the determinants of organizational structure. Why do we need to consider those factors?

Solutions

Expert Solution

AN organizational structure refers to how the various operations of the organization are structured to achieve the end goals of the organization.The various determinants of organizational structure are strategy,environment,technology and human resources.The strategy refers to the plan that the organization has to achieve ts goals in the long run.The strategy of the organization should be designed according to the strategy that the organization intends to pursue.A flexible structure is often preferred by organizations that intend to pursue a strategy focused on diversification .The environment can be internal and external.External environment refers to outside factors that affect the operations of the organization.the inside environment refers to factors with in the organization that effect the operations of the organization.Technology from an organizational context is the accumulation of skills,competencies,equipment,computers etc used by the organization to perform its operations.The complexity of the technology will have an impact on the structure of the organization.The other determinant is the human resources.The human resources from an organizational context is the sum total of the employees of the organization.The skill level of the employees will have an impact on the structural requirement of the organization.These factors as mentioned above will play a part in designing the structure of the organization,the structure in turn works towards the achievement of organizational goals.


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