The Relationship Between Organizational Structure and Strategies

Organizations and society are interrelated, and this makes it easy for any business to succeed. An organization refers to a group of people working together in a unified manner to meet the set target and hence accomplish their goal. Society can be defined as people living in a particular country or region and those who share the same traditions, regulations, and associations (Wolf and Floyd 2017, p.1754). Organizational practices work hand in hand with the society to make sure that the company can have long-term sustenance. There are fruitful relationships between the standpoints and the formation of common value as organizations as well as society are crucial when it comes to the success of organizations.

Nevertheless, the micro and macro environment of organizations keep on changing, and it is because of these uncertainties that one can actually predict organizations’ future and this, therefore, makes it hard for organizations to prepare for accidental events which are not in their control when they occur (Wolf and Floyd 2017, p.1784). For organizations to gain sustainability, their administrations need to be fully aware and also realize the significance of the organizational structure and contingency aspects that may, in the long run, afflict organizational growth. Organizational managers must, therefore, be ready to put in practice the effectiveness of corporate design by incorporating structural and contingency strategies to sustain the company which may, in turn, survive for an extended period.  

Organizational structure comprises activities such as directing, coordinating, supervising and work allocation with the aim of assisting the organization to arrive at its objectives. According to Fan et al. (2013), strategies refer to the sum of plans the firm is intending to undertake to achieve its goals. According to Csaszar (2013), organizational structure is based on approaches that are applicable. Structure therefore, refers to the activities which are listed above and at the same time it encompasses aspects such as the culture of the organization, procedures, employees and work position. An example to support the above statement can be illustrated in a firm which aims at improving its sales in the subsequent month.

The structural aspect focuses on how decisions are made. Structural factors also assists an organization on how to outline ways of meeting its set objectives (De Matta and Miller 2018, p.10). The structural aspect process begins with reviewing the current operations of an organization while trying to identify what should be enhanced to make the same organization operate even in the future. Structural or planning, in that case, is hence comprised of forecasting the outcomes the organization hopes to achieve. Also determines relevant steps which, when followed well, will aid the organization to arrive successfully to the anticipated destination like success (Bals, Laine and Mugurusi 2018, p.56)

Contingency aspect, on the other hand, is a probable economic event which may or may not take place in the future and whose outcome may be unpredictable or unknown. At times the micro factors may influence the organizational design. For instance, the difference in the characteristics of workers will impact the corporate design. The behaviour of an employee may change based on their level of education, personal intelligence, age, and work experience (Pavón et al. 2015, p.409). It is for this reason that managers are called upon to take action in considerations of various suggestions or opinions based on different characters of employees when the organization needs to make specific innovations or change the policies of the company. The macro environment is an influential variable of contingency that has been researched thoroughly as per the uncertainty of the environment. This type of environment comprises of natural forces, technological changes, inflation, and policies made by the government and it may impact the internal business operation of the company, and they are uncontrollable hence their occurrence may not be predicted.

The Relationship between Structural and Contingency Aspects of Organization

There are relationships between structural and contingency aspects of the organization. Both structural and contingency aspects always appear upon the mention of organizational structure as well as strategies given that they are interrelated and they aim at the same goals which together help in the success of organizations design. Managers are expected to include contingency aspects while designing the plan that will make the organization more successful. Both contingency aspects and risk management are fundamental mechanisms when it comes to the strategies of the business. A person starting of business with limited resources must be fully aware of the contingency and risk management factors when evaluating the merits and demerits of the planned business strategy (De Matta and Miller 2018, p.3). When planning is well addressed, this lays a foundation for an entrepreneur who wishes to establish the position in the market and gain sustainable growth. For instance, in the event where an organization encounters problems that are uncontrolled, the administration of the same company needs to consider contingency plans which may assist in solving such problems to minimize losses if any. Managers must consider contingency aspects that may take place as well as setting other plans, which may aid in covering unpredictable issues.

The length of future commitment, the degree of environmental uncertainty and the organizational level comprise the three contingencies that influence the operation of any organization’s executives. Upper-level managers are mandated to plan and allocate cash to lower-level managers whereby these low-level managers end up supervising the establishment of buildings. Also, these low-level managers are supposed to coordinate volunteers and to coordinate contractors on the appliances they should purchase. Some of the uncertainty that may affect the establishment of the buildings are aspects such as changes in weather (Tran and Tian 2013, p.225). Therefore, there is a need to have flexible plans that will address such uncertainties. The last contingency factor, length of future commitments, could affect an organization’s planning if the cash provided does not stretch to meet the long-term goals set forth when the money was first gifted. If the money is not planned for in the right way, then the overall long-term goal of building a set number of organizational housing might not be achieved.

The organizational structure of a company plays an essential role in making the company known to its customers as well as helping in the growth of the company. This is because it provides guidance and transparency on how human resource is managed and utilized (Tran and Tian 2013, p.227) Structuring the organization makes sure that there is effective communication, harmonization, and incorporation of efforts in different departments and also ensures that there are a formal report and relationships among workers and managers. The more organization expands, the more it becomes complicated in structure. It is, therefore, difficult for an organization to be managed if it lacks a formal structure and certain authority delegations (Upward and Jones 2016, p.97). Organization design relies on the business type. When organizations do their business in a stable macro environment, this is called a mechanical structure. Organic structure is suited to organizations which do their businesses in an ever-changing environment. Managers, therefore, are called upon to design the structure of their organization by panning it together with contingency aspects that may be affected by both internal and external factors. This together helps in implementing proper operating processes and procedures of making informed decisions that will assist the organization in achieving its objectives.

A business firm must also have a serene operating environment which provides it with near raw materials. Moreover, a company should operate with the latest technology Shamsuzzoha et al. (2013). The two features assist the firm to monitor the performance of the firm and the areas that are likely to be ignored. The serene environment will make the teams comfortably and will be able to produce the best for the business firm considering that the company has already distributed mandates for the groups to form organizational strategies.

A creative culture influences a viable organizational structure and the achievement of the 3 R’s. One of the R’s stands for recruitment where the management hires new, skilled and qualified employees to better performance. Wei et al. (2013) further, explain that retraining of current employees is critical because they are already conversant with the routine of the firm and will stand a higher chance to adapt to any innovation within the organization. The other “R” stands for rewards whereby employees are rewarded for their excellent performance. Some of the forms of rewards include wage increment or promotion to a higher job position. Such practices are essential because they allow the management of the firm to have a viable organizational structure that can handle forces and competition in the environment.

The ability to have goals and target in a firm is critical because it allows the firm to measure and analyse progression. A firm should follow the set goals so that aspects such as the organization’s mission and vision can be achieved with much ease. With these goals, accountability will be achieved whereby all personnel will work towards a specific target and resources and finances within the firm will be used efficiently towards the benefit of all stakeholders (Schaubroeck and Yu 2017, p.635). Therefore, it is advisable for an organization without such set goals to develop them to facilitate other factors such as planning within the firm.

How this Understanding Guide Organisational Design?

It’s essential to have a proper organizational design if an organization needs to succeed. Structural planning that incorporates contingency aspects is crucial both in the external environment and as a tool of organization design. Managers must recognize the relationship between contingency aspects as well as the role of organizational culture as guidelines of organizational design (Upward and Jones 2016, p.123). This is attributed to the fact that unpredictability in the external environment may result in the change of organizational structure. Technological advancement is the primary cause of organizational structure, strategy changes as their outcomes will always affect business operations that result in greater efficiency and transformation of inputs of the company into outputs.

In conclusion, an understanding of the relationship between structural and contingency aspects breadths success and results in stable organizational design. The macro environment keeps on changing with time, and so the organization must always be alert to any external stimulus that may hamper its growth as well as be able to adapt to any changes in the environment. Organizations must also be fully aware that change is constant. To make sure sustainability is realized, organizations must respond to all contingency aspects upon planning for the design of the organization. A successful organization ought to have an excellent organizational design.

References

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De Matta, R. and Miller, T., 2018, June. A Strategic Manufacturing Capacity and Supply Chain Network Design Contingency Planning Approach. In 2018 IEEE Technology and Engineering Management Conference (TEMSCON) (pp. 1-6). IEEE. Retrieved from https://ieeexplore.ieee.org/abstract/document/8488401/

Fan, J.P., Wong, T.J. and Zhang, T., 2013. Institutions and organizational structure: The case of state-owned corporate pyramids. Journal of Law, Economics, and Organization, 29(6), pp.1217-1252. Retrieved from https://academic.oup.com/jleo/article-abstract/29/6/1217/989792

Schaubroeck, J.M., and Yu, A., 2017. When does virtuality help or hinder teams? Core team characteristics as contingency factors. Human resource management review, 27(4), pp.635-647. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S1053482216301012

Tran, Q. and Tian, Y., 2013. Organizational structure: Influencing factors and impact on a firm. American Journal of Industrial and Business Management, 3(2), p.229.

Upward, A. and Jones, P., 2016. An ontology for strongly sustainable business models: Defining an enterprise framework compatible with natural and social science. Organization & Environment, 29(1), pp.97-123. Retrieved from http://www.slideshare.net/Annie05/organizations-role-in-society-presentation.

Wei, Y.S., O’Neill, H., Lee, R.P. and Zhou, N., 2013. The impact of innovative culture on individual employees: The moderating role of market information sharing. Journal of Product Innovation Management, 30(5), pp.1027-1041. Retrieved from https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-5885.2012.01000.x

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