Internal and External Change

Internal and External Changes
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The design of an organization’s structure is critical to the increment of the efficiency of any organization’s operations. Organizations are constantly required to adjust to the various changes that occur in the dynamic business environment. Whenever such changes occur, it is important for an organization to modify its organizational structure to coincide with the requirements of the business environment. The six key elements of organizational design represent the critical aspects that an organization’s management can evaluate when choosing the right organizational structure to adapt to business environmental changes. These elements are applicable when an organization is adjusting to both internal and external environmental changes.
Departmentalization is one of the key elements of organizations design. This element facilitates the classification and pooling of skills so as to assign a group of employees with functions that match their skill set. There are two primary types of departmentalization commonly used by organizations. Product departmentalization enables an organization to create divisions that concentrate on a certain line of products. Functional departmentalization facilitates the delegation of duties so that employees can concentrate on various functional areas like marketing, production, and finance. An external environmental change that might require the organization to specialize in the production of a certain commodity will influence the management to adapt product departmentalization.

This will ensure that the product in question receives sufficient attention in order to improve its quality. According to Rivkin & Siggelkow (2003), departmentalization can be manipulated to improve the efficiency of an organization’s operations. An organization looking to stabilize its internal operations should adapt functional departmentalization (Rivkin & Siggelkow, 2003).
The span of control is another key element of organizational design. This element defines the extent of authority possessed by the officials who occupy certain positions in an organization. If a manager is in charge of numerous employees, he is said to have a large span of control and vice versa. An organization’s management can modify the span of control enjoyed by certain officials to adapt to both internal and external business environments. For instance, if a company is obliged to standardize its production methods by the external environment, the management can increase the span of control of its production-line supervisors in order to increase operational efficiencies. Similarly, an organization can reduce the span of control if it is required to increase specialization in certain products by the business environment. Rivkin & Siggelkow (2003) reveal that the span of control is dependent on the size of an organization.
The hierarchy or flow of authority is another critical element of organizational design. An organization cannot operate efficiently without a clear definition of the level of authority exercised in various positions. Environmental changes that require an organization to increase the level of engagement between junior and senior employees influence the management to reduce the stages of the hierarchy of authority so as to facilitate communication between senior and junior employees (Daft, 2012). An organization’s management should also examine the level of decentralization or centralization of the decision-making process to adapt to environmental changes. Organizations that operate in complex business environments that require numerous and rapid decisions are encouraged to adopt a decentralized decision-making system in order to meet the challenges present in such an environment. Formalization is also an element of organizational design that gauges the level of standardization of various organizational functions. Daft (2012) believes that organizations operating in a business environment plagued by constant changes should reduce the level of formalization of its main functions. Temporary projects also form part of the key elements of organizational design. The management of an organization can deploy a task force to spearhead an organization’s efforts in adjusting to various organizational changes.
Organizational structures have continued to evolve since the beginning of the industrial revolution. The nature of the primary elements of organizational design has also shifted to coincide with the pressures of the ever-changing business environment. The element of the hierarchy of authority has particularly undergone big changes since its inception. In the earlier days, most organizations had a rigid structure that contained several stages in the chain of authority. However, modern organizations normally contain three to four stages of authority in their structure (Tushman & Romanelli, 2008). The span of control element has also undergone the changes witnessed in the hierarchy of authority. The level of specialization necessitated by modern technology has reduced the span of control possessed in various positions of most modern organizations. Although some organizations maintain the functional departmentalization system, most modern firms go for the product departmentalization system. This is mainly because it enables them to adequately satisfy a specific niche of their target market. In the past, most companies maintained a more centralized decision-making system since the business environment was simple (Tushman & Romanelli, 2008). However, these days, organizations have been obliged to a decentralized system because of the complex business environment that is present today. This is also the case with the element of formality. Most organizational functions are not as formalized as they used to be in the past.
ReferencesDaft, R. (2012). Organization theory and design. Nelson Education.
Rivkin, J. W., & Siggelkow, N. (2003). Balancing search and stability: Interdependencies among elements of organizational design. Management Science, 49(3), 290-311.
Tushman, M. L., & Romanelli, E. (2008). Organizational evolution. Organization change: A comprehensive reader, 155(2008), 174.