OrganizationDesign and Structure
OrganizationDesign and Structure
Theway organizations designed their strategic plans twenty-five yearsago is definitely different from the way they should do today. Thebusiness environment has changed hence, corporate entities need toadjust to these changes. A period of twenty-five years or even lessis long enough to have subtle and massive shifts in businessenvironments. The business environment, in this case, is the externaland internal factors that essentially determine the operations of anorganization. External factors that define the internal businessenvironment are: technological changes, change of laws,transformations in the structure and consumption patterns of targetdemographic groups, and the emergence and collapse of competition(Courtney, Kirkland, & Viguerie, 2011). Internal factors thatcharacterize the internal environment of an organization are: theinternal organizational culture, the managerial techniques, and thefinancial capacity of the organization. Going back to the wayplanning changes to change of times, the above factors change,prompting organizations to find ways they adjust. Twenty yearsbusiness environment for organizations were more predictable thanthey are today.
Whileorganizations used definite strategies in the past, the environmenthas become more uncertain, meaning that organizations need to investmore understanding the dimensions of a the rapidly changing businessenvironment. Some of the domains that business leaders andstrategists ought to understand today are whether the environment isstable, unstable, homogenous, or heterogeneous, simple or complex,and the amount of financial and human resources they need to fulfill.The contemporary organization should also understand whether theavailable resources are concentrated or dispersed. By understandingthese fundamental aspects that the organization should focus on todeal with change planning for the modern organization should be asflexible as possible. In summary, the modern organizations needs toparticular to have two essential tools in understanding the newenvironment: information about the environment and (2) the resourcesneeded to plan and execute aligned to changing business environments.
Planningis still essential, even in the wake of business uncertainty
Uncertainty defines the amount of risk that an organization faces inits business environment. Planning is multi-dimensional, whereresources are allocated efficiently based on the already set goalsand the amount of risk that the business faces in a businessenvironment (Daft, 2010). As mentioned above, one way of dealing withuncertainty is obtaining sufficient information about a givenbusiness environment. The information is needed to calculate risk.After determining the amount of risk the organization mobilizesresources to mitigate the risk by using strategic resource allocationtechniques. Unlike many years ago, the scope of business has expandedin many industries. Thus, many organizations cannot actually foreseeforces in the economic and competitive environment that potentiallyreduce the chance of success. Planning, therefore, identifies andestimates risk factors using probability techniques that areadjustable to changing conditions. Planning is the only tool that amodern organization can use to manage risk and deal with businessuncertainties.
Thesignificance of the environmental domain
Thereare some aspects of the business setting that the organization mustbe sensitive about for it survive a changing environment. Theenvironment, in this case, are all the external factors that theorganization has no control over, but can affect part or the entireorganization. For any organization to deal with the externalenvironment, it has understood its domain in the externalenvironment. The organization’s domain is targeted field that theorganization intends to supply its good or services (Daft, 2013). Inother words, it represents the specific market segment that theorganization intends to serve. By identifying the domain, it becomeseasy for knowing the external factors that the organization wouldinteract with while serving the market niche. For example, if theorganization intends to venture in the construction domain, some ofthe factors that the business will interact with include: rawmaterials, human resources, financial resources, the market,technology, economic conditions, government, socio-cultural factors,and international factors.
Changingthe organization’s domain is not a feasible strategy of coping witha threatening environment if it is done in absolute terms. Instead,the organization can seek to exploit other market domains while stillretaining the traditional domain. This is done through productdiversification (Hoffman, 2012). Deciding to serve a differentmarket niche does not eliminate the risk. However, productdiversification spreads the organization’s risk so that it becomesless complex to mitigate. Every domain has external factors thatcreate risks to the business. The best approach is to get the bestrisk management professionals that can use the external factors thatcharacterize the business domain to estimate risk. Thus, efficientresource allocation would help reduce the probability of loss. Otherstrategies that the organization can employ instead of changing thebusiness domain are changing a culture change, and a change instrategy and structure of the organization. Some of the innovativeways of instituting culture change re-engineering the organization tohorizontal forms of organizing, greater organizational diversity, andthe learning organization. The change in culture needs a change inattitude in managers so that they can work together.
Dellis an example that ventured into a different organizational domainwhile still maintaining the primary domain. Dell is known asmanufacturer of personal computers. However, recently Dell launchedother market domains such as providing enterprise services,manufacturing smartphones, supercomputers,tablet personal computers, and provide solutions to software storage.The diversification strategy seeks to create growth with a short timeby targeting different market segments.
Thelearning organization and the transnational model
Thelearning organization and the transnational model are opposite ofeach other. The learning organization is a vertical structure thatcreates distancebetween managers atthe top of the organization and workers. The structure has horizontalworkflows or processes rather than hierarchical departmentalfunctions. The learning organization seeks to flatten the hierarchywith only a few executives to hold traditional managerial positionssuch as finance, operations, or the human resources. Thus, boundariesbetween functional units are eliminated because members of teams maycome from different functional units. Conversely, the transnationalmodel is a complex organizational structure that reflects the highestlevel of organizational complexity. In the transnational model itremain relevant to a huge global firm with subsidiaries in othercountries that have the capacity to exploit both local andinternational potentials. They also have the capacity to exploitother global trends such as the rapid technological growth,innovation, global, and exchange of business knowledge on theinternational stage. The international model fits a global firmbecause it seeks to achieve global efficiency, nationalresponsiveness, and global learning all at the same time.
Courtney,H., Kirkland, J., & Viguerie, P. (2011). Strategy underuncertainty. Harvardbusiness review,75(6),67-79.
Daft,R. L. (2013). Organization Theory and Design (11th ed.). Mason, OH:South-Western, Engage Learning.
Daft,R. L. (2010). Organizationtheory and design.Mason, Ohio: South-Western Cengage Learning.
Hoffman,A. J. (2012). Competitiveenvironmental strategy: A guide to the changing business landscape.Island press.