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The Effect of Environment on
Organizational Structure
Abstract
This research work examined
how the environment affects the structure of an organization. It focused on the
types of environment in which the business organization operates and how to
choose the structure to match the turbulence in the environment based on
Griffin 1999. To solve the problem under investigation a study of Afribank
Nigeria Plc Enugu was undertaken. The major findings of this study are; 1.
Organizations must interact with their environment in order to survive. 2.
Organizations face different types of environment. 3. Organizations respond to
changes in their environment by Creating new structures. 4. There is need for
an organization to identify homogenous segment outside the organization and
respond appropriately. 5. Organizational performance is low when there is no
structural response to changes in the
environment. Based on the above findings, the researcher concluded that the
environments have impact on organization structure and hence organization
survival and recommends that the organizations should provide flexible
organization structure that will easily adapt to changes in the environment.
CHAPTER ONE
INTRODUCTION
1.1 CONCEPTUAL FRAMEWORK
The conceptual framework of this study
is drawn from business policy and strategic management. Strategic management
focuses interest on how the general management of an organization relates such
an organization to the changes in the environment so that the organization will
not be taken by surprise, thereby, incurring unnecessary losses due to
inability to anticipate and take necessary actions to contain the impact or
ultimate consequences of environmental changes. So, understanding the concept
of business environment is very important in understanding strategic management
responses Onwuchekwa (2000). The importance of strategic management can be
understood from the limited variety theorem and requisite variety imperative
theorem viewed from the law of limited variety theorem (see Pondy and Mitredf,
1979). “A system will exhibit no more than the variety to which it has been
exposed in its environment” and the requisite variety imperative which states
that the complexity and subtlety of firms’ response must match the complexity
and subtlety of the environment. From the open system conception about
organization, environment has direct impact on the organizational structure
Lawrence and Lorche (1967), Thompson (1967) so, when the business environment
changes, the organization studies the pattern of expected organizational
responsiveness and respond to those changes.
1.2 BACKGROUND OF THE STUDY
Normally, changes occur in the
environment of business organization in their day to day managerial activities.
Managers encounter series of changes. Some of the changes are superiseful and
unintended, and they possess threats and opportunities for a particular
organization. So, there is a compulsory need to consider the business
environment before designing organizational structure this made many authors to
carryout studies in organization in order to determine the effect of
environment on organizational structure and how organization attends to its
environmental demand. Churchman (1968) defines environment as something that
lies outside the organization system and determines in part how systems
performs. Onwuchekwa (1993) sees environment as those individuals,
institutions, organization suppliers who in one way or the other render
productive services to an organization but such organization cannot control the
activities of these entities. Hence organization must adapt to the demands.
Burns and Stalker (1961) found out that the effectiveness of a particular
organizational design varies under different environment conditions. Two forms
of organizational structures know as mechanistic and organic structure were
discovered. The mechanistic structure is more effective in stable environment
while the organic structure is more effective in changing environment.
Based on the uncertainties and changes
faced by different organization, this study will analyse different business
environment and suggest strategies for survival and maintenance of growth in
such environment.
1.3 STATEMENT
OF PROBLEM
The statement of problem in this study
is to investigate if changes in the business environment have impact on
organizational structure or how do managers respond to changes in the business
environment. When the managers do not respond to changes in the environment
what happens? These are the major issues that will be studied in this thesis.
On the basis of the knowledge gained from this study, a recommendation will be
made for improvement.
1.4 OBJECTIVES
OF THE STUDY
The major objectives of this study are;
1. To investigate how mangers respond to
changes in the business environment.
2. To investigate if changes in the
business environment induce structural changes within the organizational
structure.
3. When business organizations adapt to
changes in the business environment do their performances increase.
4. To make suggestions on how to adapt
organization to their environment.
The Effect of Environment on Organizational Structure
NB: The Complete Masters Project Topics in Business Administration Thesis is well written and ready to use.
