Factors Which Determine the Organizational Theory

The key factors that determine the organisational theory are formatted on the dynamics of the size of the business, for instance larger businesses tend to need more formal structures with respect to professional roles so that the chains of command and communications are clear and specific.

If the business has a diverse product range, possibly needing very different marketing strategies, then each product might need a separate division, or where the technology of production moves at a rapid pace, a more responsive task- oriented structure would be viable.

A highly skilled work force might resent a formal or rigid hierarchy, preferring a matrix or informal structure, whereas a formal culture suits a traditional hierarchy, on the other hand a more dynamic entrepreneurial culture does not match with it.

It is imperative that if the business organisation seeks marketing leadership in terms of technology, then the task oriented matrix theory will be the most effective and viable option, and if the market share is the target and goal, then perhaps the entrepreneurial theory will be the best suited.

If the organisation has a tremendous presence in the market, it can maintain its traditional structure, but to create a highly competitive environment it would be forced to adopt a more responsive matrix or entrepreneurial theory.

Organisational theory motivates the team to take decision makers to take timely action, source reliable information, give clear and precise instructions to the team, effectively implement the plans and encourages accountability and achieves the desired goals of the organisation.