Page 153 - Managing Change in Organizations

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Chapter 8 ■ Sustaining organizational effectiveness
Contingency, choice and organizational environments

So far in this chapter we have seen that various blockages can impede decision
making and choice. We have also seen that deeply held assumptions about peo-
ple and about the need for so-called rational behaviour can limit effectiveness.
Assuming for the moment that we can find ways of handling these difficulties,
can we define the characteristics of effective organizational structures and
design? This seems to depend largely on the ‘fit’ between the organization’s struc-
ture and its environment.
The design of organizational structures to suit the needs of the particular busi-
ness enterprise or organization, which provides for the coordination of the
diverse activities carried out within the enterprise or organization but also pro-
vides for adaptability to respond to changing circumstances, presents a challenge
to management which cannot be overstated in its importance. The structure of
an organization allows the pursuit of objectives and the implementation of plans.
People and resources are allocated to the tasks which must be performed, and
coordination is provided. Working methods, rules and procedures define the
ways in which tasks are to be performed and/or establish criteria for task per-
formance, output or quality. These are typically all related to reward systems,
planning and scheduling systems and monitoring systems. The structure of an
organization is directly linked to the information system.
The structure of the organization provides a decision-support system. Arrangements
are made for the collection and processing of information relevant to the deci-
sions taken by managers. Specialist posts are often created to provide for such
arrangements. Accountants and organization and methods personnel will, for
example, collect and process information on various aspects of the performance
of the organization. This information will be evaluated and presented to decision
makers, either regularly (to a senior management meeting) or in response to par-
ticular circumstances (e.g. when a major project is under consideration). The
tasks of the organization create decisions to be made. In practice decision makers
decide, from the range of tasks which could be undertaken, those tasks to be pur-
sued and for which a market exists and those to be dropped. For a decision sys-

tem to be effective, provision for monitoring trends in the market is essential.
Changes in technology, in resource markets for capital or labour and in the prod-
uct market will affect the performance of any organization and will thus require
adaptation.
Following Child (1984), the main dimensions of an organization’s structure
are as follows:
■ The allocation of tasks and responsibilities, providing appropriate discretion
over methods and use of resources.
■ The designation of formal reporting relationships, determining spans of con-
trol of managers and supervisors.
■ The grouping of individuals into sections and departments, and the grouping
of departments into divisions or other major units.
■ The delegation of authority with associated procedures for performance mon-
itoring and evaluation, which may either be regular or operate by exception.

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