Structure of an Organization
Institution Name
Student Name
Student Roll No.
Organization structure refers to the method which the organization utilizes to distribute its workers and jobs across the organization so that the tasks of the organization can be performed and the goals of the organization be achieved. Therefore, there exists a number of such structures e.g. divisional, multidivisional, matrix or functional structure. This paper evaluates the usefulness of functional and multidivisional structures. Gareth Jones (2007) defined the organizational structure as the total number of ways whereby the workforce of the organization is distributed into different tasks and their coordination then is realized among such tasks.
Adner & Levinthal (2001) observed that the way in which organization structure evolves is as a result of the shift in competition from innovation in product to innovation in process. This change, as the market for the products or service of the firm grows, causes the structure of the firm to grow as well and may therefore turn from functional to multidivisional.
Utterback & Abernathy (1975) observed that after an organization is formed it compete with other organizations in the market on the basis of its differentiation strategy. They start off on the basis of product differentiation and as they grow further, they change their focus from product alone to cost differentiation strategy as well as economies of scale. This leads them to invest more in the manufacturing process and other processes to make their product stand out as a specialized one. Tushman & Anderson (1986) observed that this process may not be uniform every time. Some technological or technical discontinuity might cause this process to halt and thus start it all over again. They further observed that some companies may also focus on process innovation to stand out against competitors e.g. Toyota. However, other companies might like to continue on the
Student Name
Student Roll No.
Organization structure refers to the method which the organization utilizes to distribute its workers and jobs across the organization so that the tasks of the organization can be performed and the goals of the organization be achieved. Therefore, there exists a number of such structures e.g. divisional, multidivisional, matrix or functional structure. This paper evaluates the usefulness of functional and multidivisional structures. Gareth Jones (2007) defined the organizational structure as the total number of ways whereby the workforce of the organization is distributed into different tasks and their coordination then is realized among such tasks.
Adner & Levinthal (2001) observed that the way in which organization structure evolves is as a result of the shift in competition from innovation in product to innovation in process. This change, as the market for the products or service of the firm grows, causes the structure of the firm to grow as well and may therefore turn from functional to multidivisional.
Utterback & Abernathy (1975) observed that after an organization is formed it compete with other organizations in the market on the basis of its differentiation strategy. They start off on the basis of product differentiation and as they grow further, they change their focus from product alone to cost differentiation strategy as well as economies of scale. This leads them to invest more in the manufacturing process and other processes to make their product stand out as a specialized one. Tushman & Anderson (1986) observed that this process may not be uniform every time. Some technological or technical discontinuity might cause this process to halt and thus start it all over again. They further observed that some companies may also focus on process innovation to stand out against competitors e.g. Toyota. However, other companies might like to continue on the
Bibliography: Adner & Levinthal (2001): Demand heterogeneity and technology evolution: implications for product and process innovation. Management Science 47: 611-628. Brews (2004): Exploring the Structural Effects of Internetworking. Strategic Management Journal, 25(5), 429–452 Dessler (2004): Management: Principles and Practices for Tomorrow’s Leaders Gort & Klepper (1982): “Time Paths in the Diffusion of Product Innovations,” Economic Journal 92(3) (1982), 630-653 Ireland (et al Jones (2007): Organizational theory, design, and change (6th Ed) Prentice Hall Oster (1994): Modern Competitive Analysis Porter (1980): Competitive Advantage. Free Press: New York. Talha (2005): Organizational structure. Massachusetts, Massachusetts Institute of Technology. Utterback & Suarez (1993): Innovation, competition, and industry structure. Research Policy 22:1-21