Name: Manisha Scrichand Student Id: 20201 -28786 Course: Business Analysis and Decision-Making Course Instructor: Imran Khan Assignment: 3 Introduction to Factors Impacting Organizational Design What you’ll learn to do: identify important factors for consideration in organizational design Now that you are familiar with the elements of organizational structure and the various forms, we will dive into the environmental forces to consider when designing an organization’s structure. Further, you will learn how a business growth cycle affects organizational choices. Solution: Organizational design is referred to as the process of matching an organization's structure with its goals, with the end goal of increasing the productivity and performance, is known as organizational design. It can be influenced by several factors and the most important and common ones are size, life cycle, strategy, environment, and technology. These are further discussed below. Organizational Size: The structure of a company becomes more intricate as it grows in size. A tiny business, such as a single department shop, a two-person advisory firm, or a restaurant, might have a basic structure. In practice, if the organization is small, there may not even be a formal structure. Individuals just undertake work depending on their likes, dislikes, skill, and/or necessity, rather than an organizational structure or specific job roles. Standards and guidelines are uncommon, and they may exist solely to give limits within which organizational members can make judgments. Organic systems are common in small businesses. Organization Life Cycle: Just like humans, organizations also go through a life cycle. There are 4 stages of an organization which includes birth, youth, midlife, and maturity. Each stage has unique qualities that affect the firm's structure. Birth stage: A firm is just getting started in the natal state. An organization in its early stages lacks a defined structure. There is little delegation of authority in a nascent company. Typically, the owner "makes all the decisions." Youth: During this stage, the group is attempting to expand. At this stage, the concentration is on growing larger. The firm switches its focus from the founder's objectives to the customer specification. During this phase, the structure of the organization becomes more organic. The formal organization is developed during this phase, and some decentralization occurs. Midlife: When the organization has attained a high degree of success, it enters this phase. A midlife organization is bigger, with a more complicated and structured framework. As the command structure grows in complexity, the owner may find it challenging to maintain control. As the organization ages, its design may become more mechanical. Maturity: When a company reaches maturity, it generally tends to be a little less inventive, least keen to expand, but more concerned with having a stable, secure place. The focus is on increasing productivity and effectiveness. Nevertheless, in order to enhance efficiency and prosperity, the organization frequently becomes less inventive. Revenue and efficiency suffer because of outdated items. Organizations at around this phase are fading gradually. Maturity, on the other hand, is never an unavoidable step. Firms suffering a fall in maturity may implement the reforms required to reinvigorate. Strategy: A corporation may elect to be one to competition with trendiest and greatest offering (differentiation strategy), or it could opt to create an existing product more efficiently and more economically (cost leadership strategy). All of these techniques necessitate a framework that aids the company in achieving its goals. In all other terms, the structure should be appropriate for the approach. Corporations that aspire to be someone to compete with latest and best product are likely to be organic, because organic frameworks allow companies to adjust swiftly to changes. Environment: The environment is the reality where the organization works, and it encompasses circumstances influencing the organization including such economic, sociocultural, legal, political, technical, and natural environment conditions. Stable or dynamic environments are frequently used to characterize environments. Customers' wants are well understood in a stable environment and are expected to stay steady for a long period of time. Manufacturers of essential commodities such as bleach, household equipment, and paper goods are examples of firms that encounter reasonably stable situations. Customers' desires change all the time in a dynamic environment, which is the polar opposite of a stable one. This state is sometimes referred to as tumultuous. Furthermore, the technology that a corporation employs in this environment may need to be constantly enhanced and updated. Electronics is an example of an industry that operates in a dynamic environment.
