environment has three dimensions stability-dynamism simple-complex abundant and scarce
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Environment has three dimensions Stability-Dynamism Simple-complex Abundant and scarce
Dynamic environment means rate at which environment is changing is high i.e. volatility is high
Environment capacity means if resources available in environment are scare or abundant
Complexity: Degree of heterogeneity in the elements of environment
More the dynamism of environment lesser the formalization, centralization and complexity (by virtue of division of labor) as more of cross functional team work would be required.
Social complexity could be high depending upon nature of business
More the complexity of environment lesser the formalization, centralization and complexity
However, more the capacity of environment more the formalization, centralization and complexity (by virtue of division of labor)
Elements of organizational configuration
Operating core: Employees who perform basic work related to production
Strategic Apex: Top level managers who are charged with overall responsibility of organization
Middle line: Managers who connect operating core to strategic apex
Techno structure: Analysts who have responsibility of effecting certain forms of standardization in the organization
Support staff: People who fill the staff units who provide indirect support services for the organization
Simple structure
Informal power: strategic apex Formalization: low Size: small Centralization: high Complexity: low (no need of division of
labor) Example: small retail outlet
Machine bureaucracy
Size : large Formalization: high Centralization: high Informal power/ key part of design:
Technostructure Techno structure is responsible for
bringing in standardization of jobs like preparation of job description, time and motion study engineers etc.
Most suitable in stable and simple environment and where technology can be standardized
Mass production firms like steel and energy firms follow machine bureaucracy
Professional bureaucracy
Combines standardization with decentralization
Centralization: Low Formalization: Low (it is actually
internalized by virtue of professional degree)
Complexity: high (by virtue of social complexity)
Example: hospitals, universities, engineering design firms
Informal power: rests with operating core as they have critical skills that organizations needs
Most appropriate in stable and complex organization and technology is engineering type
Divisional structure
Each division set of autonomous units having machine bureaucracy configuration
Informal and formal power: with middle management
Central headquarter provides support services like taxation, legal
Divisional Structure
Should be used when strategy opted is of diversification
Environment is simple and stable Standardization: high Formalization: high Centralization: moderate (operational
decentralization, strategic centralization)
Adhocracy
Formalization: low Centralization: low (mostly
decentralization) complexity: Low (by virtue of division of
labor as one has to work in team) high in terms of social complexity
Informal power: All experts Environment: Dynamic and complex