Factors Affecting Design

•    Size

Size may be by number of employees, assets, sales etc.
In a small company you may find an employee doing many jobs but as the company grows each employee tends to stick to one well defined job. Smaller firms tend to have fewer rules for how things should be done and more flexibility in how employees can confront problems.As the firm grows the tendency to create more rules and to reduce flexibility increases. Organizations tend to be more centralized when they are small while bigger ones are more decentralized. As the company grows alterations in its design becomes inevitable.

•    Technology

Technology refers to the set of conversion process used by an organization to transform inputs into outputs. Organizations that have mass production (assembly line style) may be more effective if they use systems 1 design. Small batch or unit technology are better using system 4 which allows the flexibility to react quickly to customer requirements.

•    Environment

Environmental uncertainty can be captured by environmental change and environmental complexity. A highly dynamic environment will favour type 4 design while a relatively static environment will favour type 1 design.

Organic Design

Developed in the 1960's by two British researchers Burns and Stalker. It is based on open communication, low levels of specialization and standardization and high cooperativeness. The commitment to organizations tasks and goals is valued over loyalty or obedience, while communication can either be horizontal or vertical depending on who is more knowledgeable (i.e. the leader is not assumed to be all knowing).