Matching Contingency Variables and Organizational Structure Introduction

The organization of power within a corporation is a rigid dichotomy between centralization and decentralization. Substitute strategies can exist anywhere along the spectrum whether they are completely centralized, completely decentralized or somewhere in between. Though Cervus’ methods are substitutable, centralized policies have not proven to be nearly as successful in maintaining

A wise man once said, “The only permanent thing in the world is change,” an adage that rings especially true for organizations in this fast-changing era of technology and communication. Daft very deftly puts the inescapable need for change in three simple words, “Innovate or Perish” in his book “Understanding the Theory & Design of Organizations” [2].

The authors also correctly identified the inferior culture of the US bureaucracy in comparison to more agile commercial firms. While performing relatively slowly, rigidly, and inefficiently, the bureaucracy would continue as normal until it finds itself outmaneuvered and outgunned by more agile threats. Moreover, within the US bureaucracy, the few leaders who are capable of revolutionary thinking are often marginalized and buried by the more conservative thinkers. Successful commercial firms, on the other hand, have proven to perform more quickly and efficiently through the correct allocation of resources. This can be seen in the most successful firms to include Apple, Google, and Amazon with a much more streamlined and less risk averse as well as profitable cultures.

The job design and the motivation are not self-sufficient to increase the productivity and they require an organizational structure to further coordinate organizational activities. Organizational structure, through its chain of command, coordinates, motivates and monitors employees.   Buchanan and Huczynski (2010) argue that the structure of the organizations serves 3 functions:

It is depicted that modern organizations tend to incorporate the aspects of the open systems with those of the natural and rational perspectives. Examples include the institutional, transaction cost, and the contingency and the contingency theories. Organizations adopt the open system that accommodates the other two theoretical perspectives for it to exist (Davis & Scott, 2006). These organizations tend to have structures that are based on the processes, the products, and the function.

Wal-Marts upper management is far different than that of Target; however their store management is almost a mirrored projection. They have a general manager and two co-managers. After that they have assistant managers, then department managers the quantity of those management positions is based off of store size and volume. Now you have reached the lowest level which is basic, hourly employees. Target stores

Here is a first hand account of culture, structure and systems not being in harmony. In 1994, Ticketmaster (TM) United States became a major presence in the ticketing industry. As part of their growth strategy, they expanded through the re-acquisition of all licensees. One of the licensees was the Canadian Ticketmaster business. From 1995 to 1997, TM Canada was forced to transform organizationally to become similar to our American parent. The cultural breakdown occurred when transitioning from networked “(high on sociability; low on solidarity)” to mercenary “(low on sociability; high on solidarity)” (Langton & Robbins, 2007, p. #341-342). For example, the lack of accountability

As Canada’s oldest bank that officially opened for business on November 3, 1817, BMO has been helping its customers and communities for over 190 years, offering them a broad range of personal, commercial, corporate and institutional financial services across Canada and in the United States. It has approximately 16,200 employees and over 960 branches across Canada. As one of the Big Five banks in Canada, it has been passionate to build team strategies and to try new challenges.

It is evident that both positive and negative aspects of both approaches exist in the current climate, and from a basic understanding it can be drawn that varying aspects of each approach can nullify the negatives of the other in some manner. Consequently I believe the works of the Burns and Stalker (as cited in Grey, 2012) should be considered, in which it is suggested organizations can be seen as mechanistic and organic (roughly translated to bureaucratic and post-bureaucratic) depending on contingencies. This contingency approach would see organizations exhibiting differing behaviors based on the environmental factors that they work within and the assets that they have so that they may better suit the needs of workers, employers, consumers

The Contingency theory, developed in 1950s, argues that there is no 'one best way ' to structure an organization and we face different possibilities when determining how it should be structured and how it should be managed. Successful organizations adopt structures that are an appropriate response to a number of variables, or contingencies (Enoch, 2006).

The strategist must determine the interplay between that innovation and the organizational structure that it will impact. The strategist must also understand how the innovation reacts to the history, rules, and values of the members of the organization. This link between an innovation and the social-cultural structure of the military is critical to resolving the paradox of innovating in a change resistance society. While multiple books have been written on this concept, the following highlights three means by which strategic innovators can implement

Organizations can have open or closed systems. Open systems interact with environment through giving and receiving information (Vogt, 2013). Contrary to widely held belief that organizations are closed systems, the virtue of the fact that they exchange resources with their environment qualifies them to be open systems. Public relations department is considered to be an open system because it interacts with the outside environment on a regular basis (Vogt, 2013). In closed systems all interactions and knowledge are transmitted within the system only. This hampers growth because the flow of information cannot allow for interaction with the outside environment (Vogt, 2013). Closed system organizations are known for setting up a hierarchy of offices, creating rules that guide performance, and separating personal and professional rights. Closed systems hold efficiency and control in high esteem. A company's production line is a typical example of closed system. Any deliberations from top level management or information from competing production lines cannot interfere with its activities (Vogt, 2013). Workers in that line are obligated to their tasks on that line with interference from any quarter. Research and Development within organizations like the computer organizations are a closed system because such departments do not interact with outside division. This is purposefully done to protect trade secrets and inventions from being leaked to competing

First, the contingency paradigm, a closed system, considers uncertainty and how changes in the environment affect the internal aspect of the firm (Tolbert & Hall, 2009, p. 162). The elements can include items such as size and technology, as it relates to customer demand to name a few. Another example might be that a small firm would function better in a centralized fashion verses a large firm that would benefit more from a decentralized method, whereas, fast paced environments may require high technology and slow paced industries do not. The point here is that there is not one best practice for leading or structuring a firm, hence, the company should fit within the environment depending on internal and external factors (Long, 2014). It is important to note, hhowever, coordination can become problematic in this theory. For illustration, let’s say some environmental factor cause a company to change structure from a simple structure to a more complex one. Problems with coordination in the separate departments could present itself as communication and interaction is vastly different. The key here is for the firm to adapt to the environment, as well as, integrate the activity to make a seamless whole and reduce uncertainty. In fact, the best way to organize should be contingent upon

Moving away from “Mechanistic” metaphor originated from the bureaucratic organizational theories in the early 1920s. Morgan (2006) presents a more biological view of the organization. Described as a living system the “Organism” metaphor is dependent on wider environment and functions. Such organizations are open systems and more inclined to adapt, grow, survive and to meet the needs of organizations to operate more efficiently. The flexibility to change to the best-suited structure also introduced. As organizations tend to appear and thrive in certain environments, the functions are adjusted to establish more orderly and stable environments. In line with Morgan’s “Organism” metaphor (Morgan. 2010), if they do not adapt, organizations become week and die when those needs not met.

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