There Is No one Best Way to Structure an Organization

An organization is a deliberate arrangement of people to dispense tasks for specific purposes. An organization structure refers to the formal arrangement of its level of authority, allocation of duties and rights within the organization. It determines the rules and manner of the organization, delegating the roles and responsibility for employees within each level of the organization. This essay will argue that there is no one best way to structure an organization. As the structure of the organization is differ by four main factors for different entities. Managers will recognize the situational differences by considering the four contingency factors in determining the most appropriate structure to be used in order to achieve the organization's best interest. The four main factors are the strategy of the organization, the size of the organization, the level of work technology and the degree of environmental uncertainty. The following content indicates how different organization structure helps the managers to better achieving the goals.

In the first place, studies shows that external environment and strategic decision affect the features of the organizational structure to help implementing successful strategy (cited in Pertusa-Ortega, Molina-Azorin, Claver-Cortes, 2003, 1283). Strategies varied from company to company. There are three dimensions of companies' strategies: innovation, cost minimization and imitation. An innovation strategy is strategy for special meaningful and original created products. Example for this could be Google. Hoskisson suggests that company will use different organization structure to fit its strategy (cited in Qiu, Donaldson, 1987, 82). Thus company as an innovator may seek the flexibility that an organic organization provided. The cost minimization strategy defines the organization's tightly controls of costs. This describes Coles' strategy. It is noteworthy that Miller thinks that any alteration of structure can be fail after changing firm's strategy (Cited in Pertusa-Ortega, Molina-Azorin, Claver-Cortes, 2002, 1284). In order to fit company's core strategy, Coles will look for efficient, stable and tight controlled mechanistic structure. Imitation strategy is trying to reach on the best of both the former strategies. It seeks to copy the successful ideas of the leaders in the market and trying to minimize the risks and costs at the same time. Clothing manufacturer in mass-market may rip off the styles of the designers. Research claims that changing structure to fit company's strategy will result in better performance achieved (cited in Pertusa-Ortega, Molina-Azorin, Claver-Cortes, 1980, 1284). The objective comes from the strategy. According to Chandler, the structure of organization should follow the strategy of the company (cited in Pertusa-Ortega, Molina-Azorin, Claver-Cortes, 1962, 1282).

Convincing arguments could be made that the effectiveness of different organization structure is highly affected by the size of the company. Meyer supports that increasing size leads to organizational structure differentiation (cited in Ford and Slocum, 1972, 565). Large size organization such as McDonalds tends to have greater number of staff, working specialization whereas small size organization can behave informally. Simple structure of an organization with low departmentalization, wide spans of control, centralized authority and little formalization is then introduced to small size company. The weakness of simple structure is it only effective for small business due to high centralization and less formalization will cause information overload for the manager. Further, a large size business such as BHP Billiton is more likely to have less administrative