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Contingency factors

Technology, size, environment

Technology: the knowledge, tools, equipment, and work techniques used by an organization in delivering its product or service

Two critical aspects: technological complexity and interdependence


Size: research on relationship between size and various structural characteristics.

Tendencies: 1. as org-n grow, likely to add more departments and levels – structures become incr. Complex. – movement to divisional structure. 2. grows tend to take incr. Number of staff positions in order to help top mngt cope with expanding size. 3. additional rules and regulations are needed. 4. Growth – tend to be more decentralized, due to add. rules and regulations, decision making at lower levels.



Stable and unstable environments – different structures.

Stable – mechanistic characteristics, such as high centralization of decision making, many rules and regulations, mainly hierarchical communication channels

Unstable – organic characteristics – decentralization of decision making, few rules and regulations, both hierarchical and lateral communication channels.


Matching strategy and structure


  1. Niche differentiation. Aims at distinguishing one’s products and services from those of competitors for a narrow target market
  2. Cost leadership. Emphasizes organizational efficiency, products and services can be offered at prices lower than competitors
  3. Innovative differentiation distinguishing one’s products and services from those of competitors, by leading a complex product or service innovations
  4. Market differentiation. Distinguish from other by adv., segmentation, prestige pricing; may be not better but have good promotion, service reliability, attractive package, etc.



Date: 2015-01-12; view: 913

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