Factors Affecting Organizational Design

Market size: small markets will normally use Job Production as the cost of machinery will make the business lose money. Bigger markets will require flow production or batch production as the demand for the product is increased.

The relationship between an organization’s strategy and structure are extremely important because it “directly impacts a firm’s performance” (Rothaermel, 2013, p. 309). Also, as an organization grows, it should reevaluate the current strategy and structure to ensure that it remains the optimal choice for the organization (Rothaermel, 2013). The four types of organizational structures, listed in order of least to most complex according to Rothaermel (2013), are: (1) simple, (2)

small business can use one of three primary organization structure options: functional, divisional or matrix. Essentially, the organizational structure creates a business hierarchy to increase the efficiency and effectiveness of the business operations. Different small

Defining and identifying an organization structure affects the organization in two big ways – it provides the foundation on which standard operating procedures and routines rest and it determines which individuals get to participate in which decision making process.

All businesses have organisational structures, even if they are small or big, they have some type of structure so they can operate productively.

To have a successful organization, companies need to have an organizational structure. Organizational structure is used as a foundation to ensure each department as well as employees knows the proper direction to take. The Home Depot is one of the largest home improvement retailers in the world. Home Depot is one company that incorporates organizational structure in their day- to -day business. The Home Depot organization will be evaluated to compare and contrast the impact of organizational structure.

"A company can start out by using one of several organization structures. However, companies can sometimes increase their effectiveness using multiple organization structures. The decision for

The structure of the company also has an influence on the organization. Organizing the company by department allows the employees to build strong teams. It also allows the teams to support each other’s daily functions. The structure of the organization also effects number of personnel hired into the company. The structure also effects departmental and organizational hierarchy. The departmental organization within the company is also important as it helps to determine departmental collaboration as well as the role of each person in the department (www.smallbusiness.chron.com 2013).

The structure of an organization can vary depending on the company. This is responsible for maintaining and outlining specific duties or task within the organization. Depending on the company they can choose between a centralized or decentralized structure. Centralized organizational structures focus management authority and decision-making in a single executive team, with information flowing from top managers to various business units (Centralized Vs. Decentralized Organizational Design, David Ingram, 2017). Decentralized organizational structures, on the other hand, look more like multiple smaller representations of a single structure, featuring management redundancies and more close-knit chains of command (Centralized Vs. Decentralized Organizational Design, David Ingram, 2017). Within these, there are more specified structures with different advantages and

Though it is obvious why understanding organizations is critical to business success, nevertheless it is worthwhile to review these reasons. The structure of a firm either enhances or hinders efficiency and productivity. In other words, how information flows and to whom, whether and how many parts of the work process is redundant, how clear and precise is the reporting structure, if and how new ideas and products are promoted - these and many more issues are obvious consequences of structure and profoundly affect the success of the business.

Organizational structure is definitely a must have in an organization. Organizational structure is designed to form and develop clear lines of order to control an organization getting the best use of the organizations resources. According to Mahmud Hasan, some advantages of organization structure are that is easier to control the resources and they can be rationed and allocated to different units to use them at their more productive use at a micro level. Another advantage would be that clearly defined reporting lines make it easy for employees to know whom to report to while reducing redundancies by eliminating extra or unproductive processes. Other advantages are to streamline processes by giving them more focus and adoptive nature, reduce cost because the controlling of various cost control centers are controlled at micro level. Lastly, another advantage is it will help reduce cost because the controlling of various cost control centers are collected at micro level (Hasan, 2010).

Mass manufacturing entails the production of products in large quantities and it’s the advantages that come with such kind of production that makes it attractive to many manufacturing companies (Libralato et al., 2012). One of the advantages of mass production is that all equipment, material and labor required are located under the same roof. Mass manufacturing is profound in various industries including the automobile industry, textile industry, and telecommunication industry among others (Qiao et al., 2006).

1.2 At least two different organizational structures are identified, described, and compared in terms of their design principles.

Organization is the strength of any business. The more organized and efficient the different components in the business are, the better it functions and produces.

The process of structuring an organization is akin to building something with a box of bricks. The bricks are the key activities or groups. First thing to do is define what these bricks are. Then this is fitted together to build up a structure. There will be several ways which these bricks can be grouped together. “Experimenting with alternative arrangements will help decide which pattern looks best. These could be an outcome of two to three structures” (Boutros & Purdie, 2013).