Which structure is best for your organization? The answer depends on several factors that collectively are referred to as contingencies of organizational design. This exercise will review four of the most important contingencies of organizational design.

To complete the exercise, you'll answer a set of questions in which you'll try to select the best structure for organizations in a particular environment. The most effective managers are those who are able to recognize these contingencies and make adjustments in their organizations to ensure a more appropriate structure.

Most organizational behaviour theories and concepts have contingencies. What works well in one situation might not work as well in another situation. The contingency approach is relevant when choosing the most appropriate organizational structure. There are four contingencies to consider when choosing the appropriate structure: the external environment, organizational size, use of technology, and organizational strategy.

Read the following scenario and then answer the questions that follow. Your correct understanding of the contingencies of organizational design will generate a strategy to select the appropriate organizational structure.

Few organizations face an environment that changes as quickly and dramatically as those that manufacture computer processors. It seems that overnight, cutting$-$edge technologies can become obsolete, and companies that were at the top of their game yesterday are today nearly forgotten. The rapid introduction of new products and novel application of existing products makes for little, if any, predictability. As the saying goes, "the only constant is change."

Two aspects of the environment keep things especially uncertain for these organizations. The first is that the companies face an ever$-$growing number of environmental elements, such as constantly updated software, mobile technologies, storage media, and physical space limitations$.$ The second aspect of the environment that makes things difficult is the diverse variety of products, services, clients, and regions with which, and in which, these companies do business. In the past, the industry leaned heavily toward producing computer processors for desktop computers. Now, these computer chips are part of automobiles, phones, tablets, navigation systems, smart watches and other $$ technology wearables$,$ as well as countless other consumer products.

Another aspect of the environment that changes rapidly is the technology these companies use to manufacture their products. Since customer needs and wants are constantly shifting and expanding, few standard procedures can be implemented, and those that can soon have to be changed. The work of designing and manufacturing new types of computer processors is anything but routine and demands the efforts of employees with high levels of expertise.

Of course, there is money to be made in this industry, but not ad infinitum. The level of competition is fierce, and firms struggle to retain customers while, at the same time, win them away from each other. The key to success seems to be constant innovation as customers are obsessed with having the latest, fastest, smallest, and most powerful gadgets.

Based on this description of the environment, select the appropriate organizational structure for firms in this industry.

Which organizational structure would be appropriate for these firms given the high rate of change in their environment?

Multiple Choice

strategic

mechanistic

organic