Application of Organizational Structure
Jim Johnson is the CEO of a major manufacturer of farming equipment. His company has been in business for the last 100 years and has been very profitable. The company is very formal and tall with formalized communication channels and rigid hierarchical relationships. Mr. Johnson makes all major decisions. This has worked very well until lately. It has begun to have some major global competition. Companies overseas are bringing new products into the United States at a lower price.
Furthermore, just yesterday, the new vice- president had mentioned that he felt that there was a major market overseas for the company's products. As its strategy was beginning to change, Mr. Johnson also realized its structure too would need to change, but to what? The company was large and, prior to these changes, the technology utilized, while extensive, had been very routine. What is he to do?
-Which of the following contingency variables had the biggest impact on the need for changes in Mr. Johnson's organization?
A)technology
B)size
C)environment
D)management

Question

Quizplus · Accepted Answer

The major impact comes from the environment, specifically the introduction of global competition and the identification of new overseas markets, necessitating a change in organizational structure to adapt and compete effectively.