How do the four contingency variables influence organizations' structure?
During 1970s, the United States of America was suffering unprecedented social, economic and political instability, with the great impact posed on western society by the crisis of oil, and the changing environment all the industries were facing. Previous management theories, such as scientific management theory, science of behaviour management theory and so on, only focused on how to improve enterprises' internal organizational structure. Furthermore, what the vast majority of these theories pursued were models and principals of universal suitability and the best solution to the unstable environment. Unfortunately none of these theories worked. As a result, people no longer believed that there would be any certain theory that could provide the best solution. Instead, they must use different methods under the changing conditions. In 1973, there was a new theory carrying, called contingency theory. In contingency theory, Jay Galbraith (1973) stated that there is no one best way to organize; any way of organizing is not equally effective.
Whatever the way, in which organizations construct their organizational structure, it is dependent upon the following four contingency variables: technology, size, degree of environment and the organizations' strategy.
This essay is focus on how the four contingency variables influence organization's structure. The more contingency variables confronted by an organization, the more differentiated its structure needs to be. An organizational structure is a formal framework by which job tasks are divided, grouped and coordinated (Robbins, et al., 2003). The top managers of the organizations spend most of efforts to design the organization structure, in order to approach their objectives. To design the organizational structure, it involves six key elements, such as: work specialization, departmentalization, chain-of-command, span of control, centralization and decentralization, and formalization (Robbins, et al., 2003). The right organizational structure would allow their...