Writing a Paper on Three Factors That Influence How an Mnc Selects an Organizational Structure

Topics: Management, Organization, Economics Pages: 2 (542 words) Published: December 7, 2010
Factors that influence the selection of an Organizational Structure

The first factor that I think has an influence on selecting an Organizational Structure would be strategy. Strategy determines how an organization is going to position itself in the market in terms of its products. There are two types of strategy: differentiation and cost-leadership. Differentiation strategy is when an organization wants to have the newest and best product. Cost-leadership strategy is when the organization produces a product that is already on the market but is more efficiently and more cost effective. Either structure is used to help an organization to reach its objective.

The second factor would be the organizations environment. It is where the organization operates and includes conditions that influence the organization such as economic, social-cultural, legal-political, technological and natural environment conditions. There are two types: stable and dynamic. In the stable environment this is what the customer desires. It is understood and should be considered long term. For the dynamic environment the customer’s desires will change constantly. The stable environment is considered to be mechanistic. It enhances the long term performances of the organizations.

The last would be technology. Using technology allows the organization to task by using tools, equipment, techniques, and human know-how. The use of technology gives organizations a greater results and efficiency as well as lower cost for the organization. There are three categories: small-batch production, mass production and continuous-process production. The small-batch is used to make a variety of custom, made-to-order goods. These are made for a specific customer to meet their specifications. Mass production is used for a company that will need a large number of goods that are uniformed. This is usually done in an assembly line environment. Continuous-process is when goods are created by...
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