Sustainable Organizational Design: Contingency Theory Analysis

This essay explores the core concepts of sustainable organizational design, focusing on contingency theory and its implications for managers. It examines structural dimensions like formalization and centralization, and contextual dimensions including the environment and organizational goals. The essay analyzes the impact of these dimensions on stakeholders, both internal and external, and discusses ethical considerations within organizational design. The analysis incorporates relevant information from various sources to provide a comprehensive understanding of how organizations can adapt to shifting stakeholder agendas and create effective structures.

Running Head: SUSTAINABLE ORGANIZATIONAL DESIGN
Sustainable organisational design
Name of the student
Name of the University
Author’s note

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Table of Contents
Introduction......................................................................................................................................2
Implication of contingency theories for managers..........................................................................2
Structural dimensions......................................................................................................................3
Formalization...............................................................................................................................3
Centralization...............................................................................................................................4
Contextual dimensions.....................................................................................................................4
Environment................................................................................................................................4
Organization goals and strategies................................................................................................4
Ethical considerations......................................................................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

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Introduction
An organizational design includes activities like provision, coordination, structures,
supervision and processes that work towards the achievement of the goal of the organization.
Organizational design includes many dimensions like specialization, formalization,
centralization, hierarchy of authority and professionalism (Albers, Wohlgezogen and Zajac,
2016). The objective of the assignment is to discuss the key aspects of organizational designs
like structural and contextual dimensions of the organization. Further in the assignment, it also
includes hoe these dimensions affect the stakeholder inside and outside the organization. The
assignment further explains the implications of contingency theory for the managers as well as
the ethical consideration and implications of the dimensions of the organization design.
Implication of contingency theories for managers
A contingency theory is a management theory that explains that there is no proper way to
organize or run a business, to lead a corporation or to make choices. As a substitute, the optimum
development of achievement is contingent or reliant on the interior and exterior situation.
The contingency theories have impacted the managers in the organizations. When the
organizational structure is revised, the administration reviews the managerial thinking in
determining the efficiency. One of the popular strategy is implementing the theory of
contingency management which is based on the fact that there are numerous methods for
managers to implement choices in an association grounded on various aspects. In simple
arguments, the contingency theory of management involves elasticity for the managers to assess
every condition and create conclusions exclusive to the circumstances (Alexander, 2017).
Application of the contingency theory of management entails managers to be attentive and

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escape from depending on instructions, strategies and custom as the individual controllers for
their selections. To enhance the efficiency and boost employee morale, managers need to know
the significance of contingency theory and its constructive consequences at the workplace.
Managers can respond to the individual problems and its causes rather of neglecting or over-
reacting towards it, only with the help of contingent management style. The significance of
contingency theory furthermore assist the managers to contemplate about the significances of a
choice since this is related to the whole business. Among the key significances of the
contingency theory for managers is to provide more superior preference.
Structural dimensions
The structural dimension signifies the internal features of the organization.
These dimensions construct a foundation for determining and equating the administrations. The
two structural dimensions to be discussed are:-
Formalization
Formalization denotes to the step at which the numerous actions, instructions, events,
directions and more are declared, stated and standardized in a business. The point of
formalization is developed and is directly related to the amount of division of work, level of
allocation of power, gradation of departmentation and duration of controller. The benefits of
formalization for the stakeholders are:
Formalization decreases the irregularity of events among the stakeholders due to the
standardization of the activities. This also creates coordination between the stakeholders, from
superiors to sub-ordinates and in formalization there is no scope of verdicts among the
stakeholders because the judgements are taken on the foundation of typical instructions and

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measures. This also results in less conflicts between the members of the organisation (Strese et
al., 2016).
Centralization
This is one of the fourteenth principle of Henry Fayol. In centralization, the stakeholders
are less empowered and does not get a chance of participating in the decision making process.
All the decisions are taken by the top management. This makes the subordinates deprived of the
authority, power and duties in the organization. This results in conflicts at the time of complex
tasks (Joseph, Klingebiel and Wilson, 2016).
Contextual dimensions
Contextual dimensions describe the entire association and define the administrative
setting and effects which helps in shaping the structural dimensions. It underlines the structure
and the work processes. The two contextual dimensions are discussed below:
Environment
This constitutes all the fundamentals outside the organization. It includes stakeholders
like customers, government, suppliers, industry, competitors, trading partners and more. Due to
continuous changes in the policies and purposes, the environment is likely to affect the
stakeholders associated with it. The organization should provide an environment that should
enable the stakeholders in dealing with the complications and finding solutions to solve it at the
time of uncertainty and changeable future (Wang et al., 2016).
Organization goals and strategies
The goals and strategies of the organization helps in defining the competitive techniques
that differentiate the organization from its competitors. Goals and strategies are responsible for

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the operations as well as the relations with its members like competitors, customers and
employees. The goals and the strategies directly affect its stakeholders which also help in dealing
with the external challenges face by the organization. These are part of the underlying culture of
the organization which includes values, beliefs, norms and understanding shared by the
workforces. The strategies gives the right direction to its stakeholders in doing the right thing for
supporting and accomplishing the goals of the organization (Joseph, Klingebiel and Wilson,
2016).
Figure: framework of organizational design
Source: (Albers, Wohlgezogen and Zajac, 2016)
Ethical considerations
It is due to the ethics that how an organization reacts to its external as well as internal
environment. The ethics works with the organization culture. There are some ethical
consideration which needs to be followed in the organization like: - a well written code of
conduct for the organizational processes, ethical training to be provided to the internal as well as
the external stakeholders so that they abide by the rules and laws associated with the association.

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The organization must make the accessibility of ethical situation advice and the organization
should maintain a confidentiality of all the information related to the processes. The organization
must abide by the legal laws that affect its internal as well as its external processes (Kolk, 2016).
Conclusion
Therefore, from the above discussion it is concluded that a well organises organization
design helps in the improving the processes, communication between the external as well as the
internal entities. This also helps in enhancing the productivity and also inspire the organization
for innovation. Thus, the organization design should be designed in such a way which should
eliminate the bureaucracy and simplify the environment for its members.

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Joseph, J., Klingebiel, R. and Wilson, A.J., 2016. Organizational structure and performance
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cross-functional coopetition: The impact of leadership and organizational structure on cross-
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