Organizations are structured to take advantage of their inherent strengths and a

Question

Organizations are structured to take advantage of their inherent strengths and also to minimize their inherent weaknesses. For example, an organization may outsource its purchasing functions if they can be accomplished more effectively and efficiently by a private vendor. Evaluate how an organization is structured differently when it operates solely within one country versus one that operates in multiple countries. In particular, discuss the best fit of the multinational firm to its worldwide industry environment and the changing role of central headquarters as an organization expands into other countries.

Explanation / Answer

Organizational structure is the method by which an organization communicates, distributes responsibility and adapts to change. According to the Reference for Business, organizational structure is how a company utilizes its resources to achieve its goals. A company needs to keep its structure dynamic so that it can respond to the things that impact organizational structure. The company that can adapt is better able to survive.
Growth

A major factor that impacts organizational structure is company growth. As a company grows, the impact on the structure of the organization is significant. This can be especially true when the organization begins to expand to other geographic regions and the structure of the organization is spread out over many miles. A company may start out small, but, as time goes by, more employees may be hired, necessitating the introduction of departmental managers to help create a managerial structure. Additionally, an executive team may be required to run the various aspects of the business, and there may be the need for middle managers who would report to the managers.
Customer Needs

Customer service is important in business, so many companies have created entire divisions dedicated to customer service and retention. If a particular customer awards a large contract to your company, you may need to rearrange certain parts of your organization to accommodate the contract. For example, there may need to be an entire sales division created just for that customer and manufacturing may need to create a sub-process to build specialized products as well. As the needs of your customers shift, so to will the structure of your organization.
Technology

Technology can have an impact on how your organization is structured and how work flows. The Reference for Business points out that when computer networks became popular, it became easier for people to work as groups. People did not need to be in the same room, or even the same building, to be efficient. Technology can create positions within your company and it can eliminate positions. When filing is done electronically, there is no longer a need for as many file clerks as you once had but there is a need for a department of technicians to maintain and grow the computer network. As technology continues to change the function of jobs in the workplace, the landscape of organizational structure changes with it.

Most small businesses begin with a simple line structure in which every position in the business works towards the organization's main objective. A small family restaurant, for example, begins with everyone working directly in either cooking or serving. As the business grows however, the restaurant, like all other small businesses, begins to add staff positions in areas like marketing and finance that support the line structure. This is called a line-and-staff structure. For small businesses to keep growing, more complex structures will be needed.

part 2)
Global competition has forced businesses to change how they manage at home and abroad. The increasing rate of change, technological advances, shorter product life cycles, and high-speed communications are all factors that contribute to these changes. The new management approach focuses on establishing a new communication system that features a high level of employee involvement. Organizational structures must also be flexible enough to change with changing market conditions. Ongoing staff development programs and design-control procedures, which are understandable and acceptable, are outcomes from this new approach. Management values are changing, and managers must now have a vision and be able to communicate the vision to everyone in the firm.

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