If an environment is stable, the firm can use a mechanistic - highly structured straight-laced type of management where there is one solution for every problem. However, as with the example in the book of the rayon mill, because they were so extremely structured, they restrained sales volume as to not interrupt the daily flow, thus “shooting themselves in the heel” as far as maximizing profits.
If an environment is uncertain and turbulent, the firm would use a more organic or flexible structure that could efficiently keep up with the changing environment. In fact, in this sort of environment, as is common in the technology industries, it is more prevalent that the firm forecast what will evolve before it happens so that it can keep up and stay new and innovative in a vastly competitive market.
The liability in using such terms is that the firms are not restricted to fit into any of these categories. There should be times when the firm needs to function “by the book” yet other times when the firm needs to be innovative and stay competitive in order to survive. In fact, the book states, “an effective organization depends on achieving a balance or compatibility between strategy, structure, technology, the commitments and needs of people, and the external environment”.
1. Develop an understanding between organizations and their environments. It describes the organization as existing in an open system where the environment has a great impact on the way the organization is run.
2. The management of organizations can often be improved through systematic attention to the “needs” that must be satisfied if the organization is to survive. It emphasizes survival as the main task facing any organization which helps the goals to not be ends in themselves, but mediums to survival.
3. The focus on “needs” encourages us to see organizations as interacting processes that have to be balanced internally as well as in relation to the environment. Strategy, structure,...