Contingency Factors
From OrgChart.net
The structure of an organization has a number of contingency factors. Structural decisions are influenced by:
- Overall Strategy
Is your organization strategy one of innovation, cost minimization or imitation of one of your competitors? A strategy of innovation will favor an organic structure; a cost minimization strategy will favor a mechanistic structure; copying market leaders will require elements of an Organic Structure as well as a Mechanistic Structure.
- Organization Size
Organizations generally evolve from organic structures to mechanistic structures as they increase in size. Larger organizations also see increased specialization, departmentalization, centralization and regulation.
- Use of Technology
Companies often adapt their structures to the technology they use. The numbers of level of authority generally increase with increasing technical complexity.
- Degree of Environmental Uncertainty (Dynamic vs. Mechanistic)
Dynamic environments require organic structures, while stable environments generally foster mechanistic structures.
