Effects of Size on Organizational Structure Essay Sample

7 July 2017

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Size and the Contingency Theory

When modern societal scientific discipline started analyzing the construction of existent organisations from the 1950s it was found that organisation did non adhere to the idealistic bureaucratic mechanistic theoretical account that was defined by Weber and Fayol. Yet they adapted to their peculiar fortunes good plenty. In what is known as the Contingency Theory. research workers so turned their attending to happen out why and how the constructions of organisations varied as they did. ‚ÄúContingency theory is a rational systems perspective on organisations because it explains organisational construction and pattern on the footing of an organization‚Äôs efficient version to its fortunes. but it departs from the classical tradition in acknowledging that there is no 1 best manner to form under all circumstances‚ÄĚ ( Author. Year ) . Different surveies examined the consequence that assorted factors. frequently contextual to the organisation. such as size. engineering. ownership and control. location. etc. could hold on organisation construction.

The Aston Research on the effects of Size

Derek Phug and his co-workers in the Industrial Administrative Research Unit of the University of Aston. started an extended series of organisation research in the sixtiess. They adopted an approached based on the correlativity between the context of the organisation and the construction of the organisation. Six dimensions of organisation constructions and of organisation context each were identified. The inter-correlations between these two sets of dimensions were examined to happen their mutuality on each other. Size. engineering. beginning and history. ownership and control. location and mutuality on other organisations were the six dimensions of organisation context. The six dimensions of organisation construction were specialisation. standardisation. standardisation of employment patterns. formalisation. centralisation and constellation.

The Aston Research found that size of the organisation had the highest influence on determining the organisational construction. By comparing. engineering did non hold any important consequence on organisation construction. The correlativity between size and overall specialisation was a high 0. 75. while the correlativity between workflow integrating which defines engineering and overall specialisation was found to be relatively lower at merely 0. 38. But the multiple correlativity of size and engineering with specialisation was a important 0. 81. This implies that size plays a really critical function in finding organisation construction.

The Aston research assigned a numerical mark on the six dimensions of organisation construction entirely for the intent of comparing. in a mode similar to delegating IQ tonss to persons. It was found that big concerns by and large had really high tonss on specialisation. standardisation and formalisation. but low tonss on centralisation i. e. big organisations tended to be more decentralised. ‚ÄúTherefore these graduated tables. ‚ÄĚ the Aston research contended. ‚Äúdo non corroborate the common premise that a big organisation and the modus operandis that go with them ‚Äėpass the buck‚Äô upward for determination with luxuriant staff offices ; in fact. such an organisation is comparatively decentralized‚ÄĚ ( Pugh. 1973. p ‚Äď 70 ) . However. it is to be noted that ‚Äėdecentralization‚Äô takes on a different significance in the context of big organisations as described by the Aston research. Decentralization in such instances implied that organisational foremans chose to depute duty because the undertakings became excessively big for them to manage on their ain. However. all such deputations of duty was accompanied by rigorous formalized and standardized regulations. so that employees lower down the hierarchy barely had the grade of autonomy of determination devising that is normally associated with decentalisation.

The Aston research besides found that as organisation aged they tended to turn larger and hence more structured. formalized and standardized moving towards a more traditional and mechanistic organisation construction.

Consolidation of Findingss

In the late sixtiess. Peter Blau conducted research along the same lines in the United States to analyse the factors that determined organisational construction. He defined organisation construction in footings of structural complexness which harmonizing to him had two dimensions ‚Äď distinction and administrative strength. ‚ÄėDifferentiation‚Äô was measured by the figure of fractional monetary units with distinguishable maps within an organisation ; and ‚ÄėAdministrative Intensity‚Äô was the ratio of decision makers to workers straight involved in bring forthing the organization‚Äôs goods or services. Differentiation and Administrative Intensity both were hence steps of an organization‚Äôs extent or grade of bureaucratization.

Blau. found that larger organisation were more differentiated than smaller organisations because larger organisations had to follow a more luxuriant division of labor. In other words. larger organisations were more specialised than smaller organisations.

Blau was the first to describe that larger organisations had a smaller per centum of decision makers. and could hence be said to be less bureaucratic than smaller organisations. This determination was in direct contradiction to the traditional stereotyped big organisation with a high degree of bureaucratism. Blau explained this contradiction by what he termed the ‚Äėadministrative economic systems of scale‚Äô which dictated that in all organisations the figure of certain sorts of decision makers were independent of the volume of concern they conducted. The figure of such decision makers did non increase proportionally with addition in the volume of work i. e. the size of the organisation.

Pugh‚Äôs Aston Research and Blau‚Äôs survey are hence in conformance in two of import facet of the influence of size on organisation construction ‚Äď big organisations are more specialised but less centralized. Blau nevertheless tries to explicate the evident decentalisation of big organisations by comparing size distinction and administrative strength. Differentiation. he states. has a positive relationship with administrative strength. Therefore. the negative consequence of size on administrative strength is partially counteracted by the positive association of distinction with administrative strength. It implies that while addition in size consequences in lower administrative strength. it besides consequences in higher distinction which in bend pushes the administrative strength mark partially up once more. Thus the negation of decentalisation or less bureaucratization.

Further Confirmation

Interestingly nevertheless. a really of import survey titled Technology and Organization ( John Woodward. 1965 ) besides arrived at the same decision on the relationship between size and figure of directors in an organisation. It found that at the same degree of proficient progress. the ratio of directors and supervisors to non-supervisory forces increased with the size of the organisation. In the same class of ‚ÄėUnit and Small Batch‚Äô bring forthing houses which are considered at the same degree of proficient progress. for illustration. the ratio of directors and supervisors to non-supervisory forces increased from 1:22 for houses with a sum of 455 employees to 1:25 for houses with 4. 550 employees ; in the class of ‚Äėlarge batch and mass bring forthing firms‚Äô from a ratio of 1:14 for houses with 432 employees to 1:18 for houses with 3. 519 employees ; and in the class of ‚ÄėProcess firms‚Äô from a ratio of 1:8 for houses with 498 employees to a ratio of 1:7 for houses with 3. 010 employees ( Woodward. 1965 ) . This comes as a confirmation of the findings of the Aston and Phug researches.

It is besides to be noted that Blau states that the consequence of size on distinction and administrative strength is most marked merely when the comparing is between big and little organisations and non when the comparing is between medium and big organisations.

Size do affair

Size. therefore. affairs. Size of an organisation is by far the most important determiner of organisation construction. Contrary to traditionally keep positions associated with the Weber mechanistic theoretical account of direction. addition in size does non connote addition in centralisation albeit with some reserves on the type of centralisation or decentalisation that is being referred to. Size nevertheless has been seen to ensue in more specialisation. standardisation and formalisation.

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Effects of Size on Organizational Structure Essay Sample. (2017, Jul 26). Retrieved February 23, 2019, from https://newyorkessays.com/essay-effects-of-size-on-organizational-structure-essay-sample-essay/
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