Strategic Management: Formulation and Implementation

Environmental Turbulence

The environment can be stable, that is, one in which there is little unpredictable change. Another type of environment is referred to as changing. A turbulent environment exists when changes are unexpected and unpredictable.

The key environmental issues concern the nature of the pressure for change and the speed at which the organization must be able to respond an act. The level of environmental turbulence appears to influence structure.

One of the most famous studies of the effects of environment on organization design was conducted by Tom Burns and G. M. Stalker. In studying 20 British industrial firms, they discovered that the firms had different characteristics, depending on whether they operated in a stable environment or an unstable environment. The firms that operated in a stable environment tended to have r 2.

* The structure in terms of the formation of departments, division of labour, the configuration of the organization, and the allocation of power within the organization flows from strategy.
* The flow of information and decision processes within the organization becomes necessary in order to give people accurate and timely information upon which to make decisions. Management information systems provide formal responses to information needs.
* Reward systems need to be structured so that people's behaviour corresponds with the purpose of the strategy. Rewards systems which provide people with compensation, promotion, participation through styles of leadership, and secure satisfactions as a result of job design, are part of the total package.
* Strategy results in changed jobs. The manning table referred to in the plan of action as recognizes the need for learning and development, transfer of people, promotion, and selection of new people.
These all components affect the total organizational structure.