Question

How can a firm decide what type of organizational structure is best suited for its strategic needs?

Answer 1

There are several types of organization structures and organizations have the variety of business process and products and market structures. The best organizational structure for a business arranges jobs in a way that helps a company accomplish its strategic goals.

These are the following ways firm can decide the types of organizational structure is best suitable for its strategic needs-

1. Analyzing the company strategy like company focusing on quality control, for instance, might be more likely to favor a more mechanistic approach since it allows for greater oversight. Structure must always follow from a company's strategy.
2. Consider how dynamic, flexible and agile the company needs to be to compete and determine the stability of the market and industry.
3. Consider the organization’s size and age like small and young organizations require less of a management hierarchy than do larger, older organizations.
4. Consider different organizational structures like functional structure typically departmentalizes jobs based on work classifications such as marketing or production.
5. Review organization analysis from the previous steps to determine whether the company is better served with a mechanistic or organic approach to structure, or something in between.
6. Create an organizational chart of the structure or structures the company is considering. Graphically representing the company this way will clarify issues such as who reports to whom, where responsibility will fall, the need to add or cut employees or management levels, and changes that might have to be made in procedures.