Suppose you have been hired as a consultant to diagnose the environmental characteristics of your college or university. How would you describe the school’s external environment? Is the school’s existing structure appropriate for this environment?

This discussion question should raise some interesting ideas about the college’s environment. Students should carefully consider the four environmental elements, then assess whether the environment calls for more of a mechanistic or organic structure.

Mechanistic structure has narrow span of control, high centralization and high formalization.

Organic structure has wide span of control, decentralized decision making and low formalization.

Many people discover that different parts of an organization face different environments. For example, an online learning centre would face a dynamic and hostile environment because of the rapid pace of technology and number of competitors. Here are some details about the four environments.

Dynamic environments have a high rate of change, leading to novel situations, so organic structures tend to be best because employees are more flexible. For example, network and cluster structures seem to be most effective in dynamic environments. In contrast, a more mechanistic structure (high use of standardization) is best in stable environments in order to achieve efficiency.

Complex environments have more elements to consider, such as more stakeholders. Decentralized structures are therefore better suited to complex environments because they allow people closest to the environmental information to make the main decisions.

Diverse environments have greater variety of products or services, clients, and/or jurisdictions. A divisionalized form aligned with the diversity is the best structure for diverse environments. For example, companies with many distinct products in a single area would be best with a product-based divisional form.

Hostile environments have a scarcity of inputs and competition in the distribution of outputs. They are usually dynamic environments because access to resources and demand for outputs are less predictable. Organic structures are most appropriate in hostile environments in order to maintain flexibility. In extremely hostile environments, the organization may need to temporarily centralize. This is because crisis situations call for quick decisions and direct supervision is the fastest form of coordination.

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