Different organizations use different structure for different reasons. There are four distinct reasons for variety of organizational structure. These are as follows-
1. Strategy: An organization’s structure is a means to help management achieve its objectives and objectives are related with the organizations overall strategy. There are three dimensions of strategy- Innovation, cost minimization and imitation. Different strategy gives different output, so different organization uses different strategy. For this why structure differ.
2. Organization size: Organization size is another reason for variety of organizational structure which significantly affects its structure. for instance, large organizations- those that typically employ 2000 or more people tend to have more specialization, more departmentalization and more vertical levels. On the other hand, small organizations those that typically employ 200 or less people tend to have low specialization, rigid departmentalization and high formalization.
3. Technology: The term technology refers to how an organization transfers its input into outputs. Every organization has at least one technology for converting financial, human and physical resources into products or services. For adapting with different technology, different organizations use different structure.
4. Environment: An organization’s environment is composed of institutions or forces outside the organization that potentially affect the organization’s performance. Different organization face different environment like dynamic, scarce and complex environment. So the organizational structure varies.
Finally, from the above we can say that, on the basis of organizational environment and size and the usage of technology and strategy, the structure may vary from one organization to another organization.
