Environment of an Organization or Business - Case Study Example

Organisational Theory Roll No: Teacher: 29th November Outline Introduction Contingency planning is essential in an organization. It is a plan for unanticipated events. Managers are required to analyse their organizational structure for correct contingency planning. Body In contingency planning, determinism and strategic choices should be considered by the management. An organizational structure can be judged by its performance or level of technology employed in the organization. The environmental determinists view the organization as being in regular relation with the environment within which it exists. The more actors or networks that are relevant to a company, the more complex its environment is said to be. To be efficient, an organization depends on its environment, a company has to structure and re-structure repeatedly to match the market needs. Mechanic and organic structures are two kinds of organization’s structures used by accomplished companies. Strategic choice and environment are central concepts. A company is dependent on its environment for its sales, labour, raw materials and so on. Conclusion As the environmental situation changes, the organization-environment relationship also changes. Environment influences strategic choice made by managers, the structure of the organization and restricts the managers to decide according to environmental needs. Organisational Theory All the businesses that are operative today need a well-defined contingency planning as the word contingency keeps a lot of importance in today’s world. In structuring the businesses and planning for their safe working and minimized risks, contingency planning is essential. A proper design should be there, work categories should be described and administration should be well established. According to Buchanan and Huczynski (2010), contingency became a part of managerial thinking in the 20th century and before that managers showed a little concern for the completely contingency approach in relation to outside environment of the organization and factors of contingency. Environment of an organization or business setting plays a crucial role in enabling managers to produce a contingency plan. The approaches of contingency are directly related to environment of the business setting. The variety of technology that is employed in an organization, the environment of the organization and the function of environment, magnitude of the organization and many other contingency factors, all should be taken into consideration by the administration while developing a structure of the organization. All the events that are unanticipated come under the heading of contingency planning. Contingency planning involves the setting of backup strategies, crisis retorts and recuperation after a disastrous happening. It is not necessary that after development of a good strategy for dealing with crisis, everything goes fine. However, there is a clear probability of a safe way out. Historically, we can see a lot many examples, which show that well-developed plans came out as havoc. However, if there are chances of crisis happening, there should be a well-structured contingency plan to control the situation. In a contingency plan, expected and unexpected, all risks should be identified and procedures should be there for handling crisis. Because of contingency planning, the businesses can function smoothly. The managers of an organization are needed to develop a contingency plan by examining the working and environment of the organization. They are also required to conclude and put into practice the structural design that most suits their organization at a specific period. Upgrading and modifying the structure according to the needs of the business and proper supervision, all should be performed by the managers in order to develop a sound contingency plan. Therefore, the administration has the duty to develop a suitable design for the organization. For established environments, tough structures are required while for flexible environments, organic structures are needed. Organizational structuring is very crucial in terms of contingency approach. Determinism and strategic choices are two structural settings that take part in organizational success. The contextual factors of determinism are technology employed in the organization, environment of the organization and size of the organization. There are certain restrictions for managers in order to choose the category of structure suitable for their organization. In case of erroneous selection of structure, chances to success and sustenance of organization are endangered. As far as strategic choice is concerned, it talks about organizational design involving managers’ decision-making concerning their organizations according to their own environments. According to the analysts of strategic choices, every organization’s structure is the result of choices made by powerful persons of an organization. The Determinisms Technology Technology in an organization is very crucial as it keeps the capability of describing the form of works, functional groups, skills required at various levels of organization, principles and customs of organization. It is because of technology that various functions are done in different organizations and technology becomes the reason for defining various organizational tasks. After studying hundred British firms, Joan Woodward (1965), described various levels of functions in organizations and associated them with variety of characteristics of organizational structures. Organizations work contrastingly as compared to one another on the basis of their contrasting technologies due to which, the functions of all the organizations cannot be considered similar. Woodward (1965) described technologies associated with different job performances in organizational settings on the basis of their complexities. According to Woodward (1965), organizational structures are somewhat associated with the functionalities of the organizations. However, this association is formed with the support of technologies employed by the organizations. Therefore, it is quite clear that organizational structures are linked with performances of the organizations in relation to used technologies by that organization. Technology is responsible for settling on the suitable structure for an organization. With different levels of technologies, different structures are opted. Technology used at different organizational levels is different in terms of difficulty associated with the employment of technology and this can be analyzed while understanding various management positions. With different managerial levels, the number of managers required in an organization also increases in relation to the employees, which can be linked to direct and indirect employment. With employment of complex technologies in an organization, the requirement of higher positions’ personnel also increases. Woodward (1965) explains that an organization’s financial procedures depend on the employment of different technologies used. Companies differ from one another on the basis of their technical state of affairs. People performing all the jobs associated with technicalities in an organization have to follow certain necessitates. Technology employed in one department of an organization influences the work and procedures performed in other departments. The impact of technology can be elevated or little. It depends on the proportion of complexity associated with a technology. Technologies are not of same kinds, they are different from one another and their impact is different as well. The people working in an organization in different departments, the departments and whole organizations, all are interlinked on the basis of technology due to which, an organization is able to structure itself. This proves that the structure of an organization is the output of interdependency between technology and all other organizational employees and departments. The provision of services and the production process are affected by different sorts of technology as it is because of technology that new and advanced sorts of methodologies are employed in organizations. According to Perrow (1970), all the tasks that are performed in organizations can be of various types and are scrutinized. Because of these tasks, the employed technology that influences the structure of the organization, the management, supervision of the organization and synchronization of task performance can be divided into four categories that are routine technology, craft technology, non-routine technology and engineering technology (Perrow 1970). All these forms of technology are applicable in different forms of organizational structures. Environment According to Buchanan and Hugzynski (2010), an organization’s accomplishment depends on a combination of the organization itself and the environment, which it accommodates. Environment is a form of determinism that informs that the external or outside environment is attached to the internal processing of the organization. An organization is not only required to adjust according to its internal environment but also have to cope up with external environment in order to operate successfully. According to Paul Lawrence, the environment of an organization keeps the capability of informing the structural representation of an organization or it is the environment that reveals the real characteristics of an organization (Argyris 1972). The environment of an organization is in continuous attachment with its environment or the environment, which accommodates an organization. Therefore, it can be said that environmental determinism is about the association between the environment and the organization. No environment is free from participants. There must be some participants of an environment, which are interlinked to one another such as the consumers of the business, business associates and competitors in a business and many others who play some part in an organization. An environment is a combination of financial state of affairs, the competitive market and many other factors. A similar environment cannot be shared by all organizations and each and every organization has its own environment, which is associated to its structural development. With more participants in an organization, the organizational environment becomes more complicated. Because of different levels of complication in different organizations, the organizations vary from one another. The external and internal factors related to environment make the environment of an organization complicated and this is because of the task performance on a wider scale external to the organization. The participants of an organization linked with the environment of the organization can play an effective role in bringing a change in the organization. The change is really essential for the progress and advancement of an organization and it depends on external factors associated with environment of the organization. Because of much change and transformation, the environment of the organization becomes more and more energetic. The change that is brought in an organization due to external factors keeps the capacity of transforming the structure of the organization due to which, the organization’s environment becomes the reason for structuring and restructuring the organization repeatedly. For the successful performance of an organization, the change that is brought in an organization is of much significance. Organizational structures such as mechanic structure and organic structure play a significant part in accompanying management to make the organization financially successful. Mechanic structure and organic structure are quite contrasting to one another and all their aspects make them two opposite sides of a coin. Organizations adopt one structure or the other but most organizations are a combination of the two structures. Organic structure of an organization allows the organization to accept change and to exercise innovation in order to make an organized according to the market needs while mechanic structure restricts the organization to follow a certain set of rules and regulations that are accepted and followed by all the employees and administration of the organization. The employees in a mechanic structure are required to show expertise in their task performance and their set of accountability is also very tough; like the employees, the management is also required to show high level of leadership qualities and decision-making expertise. As far as organic structure is concerned, the employees in an organic structure are not restricted to show expertise in their performed tasks; they have to adhere to less principles and codes as compared to the employees of mechanic structure; the management in an organic structure along with the employees have to show accountability to their task performance and the decision-making process is also a little lenient in contrast to mechanic structure. However, it cannot be said that either form of organizational structure is effective and the other is ineffective. The organizational structure differs according to the needs of the organization. For innovativeness, organic structure is suitable while for a restricted unchanging environment, mechanic structure is applicable. Strategic Choice The managers of any organization have to face responsibility issues as it is the managers who are required to take decisions. They are needed to decide keeping in view the organization along with its environment. Among many choices or restricted choices, they have to select what is appropriate. Strategic choices that the managers have to make relate them to the environment. The managers have to keep in consideration the market situation and the standpoints of determinism, which are environment, size and technology. The organizational structure cannot be negated or ignored in making any kinds of decisions or choosing between any kinds of options. Organizations could have different organizational structures and there is no compulsion that organizations have to keep one similar structure necessarily as mentioned earlier on. The managers have to make strategic choices by concentrating on the environments of their organizations. While making choices, the managers associate the organizational structure of the organization with the procedures of the organization. Strategic choices can be explained as a choice that enables the organization to form a match between itself and its opted environment. The selection of organizational structure or strategic choice of organizational structure depends on managerial decisions and is not an outcome of mechanical processing. What is opted for the organization is for the betterment of the organization. In the end, it can be said straightforwardly that the factor, which influences the organization’s working or procedures is environment as environment is the most influential deterministic factor. All the organization’s procedures and activities got affected because of environment. The organization’s accomplishment or success is dependent on a relationship between organization’s environment and its own self. The structure that is adopted for the organization also comes in relation to environment as structures are opted on the basis of the environment of the business setting. In case of an environmental change, the structure of the organization also changes. The managers have to make decisions based on environment of the organization. With the creation of an organization, the environment is also created. Organizations and their administrations are dependent on their environment extensively and to minimize the impact of dependence, the management tries to seek control and authority over the resources used in the organization. For working successfully in an organization, the managers are required to reduce their level of dependency on the environment due to which, they make use of resources to implement their authority. References Buchanan, David A. and Huczynski, Andrzej A 2010, “Chapter 16: Early Organization Design” Organizational Behaviour, 7th ed., Pearson Education, London, UK, pp. 500-513. Read More