A business organization makes changes in personnel and departments and can change how workers and departments report to one another to meet market conditions. Some companies shift organizational structure to expand and create new departments to serve growing markets. Other companies reorganize corporate structure to downsize or eliminate departments to conserve overhead. Often new owners or managers rearrange business structure to create a familiar business model.
The business climate dictates many changes in organizational structuring. Company directors often reorganize corporate structure to accommodate the market shifts. Managers often pull employees out of regions where sales are declining to concentrate on operations in thriving markets. Some companies create new divisions to facilitate new products or product lines. Some companies have trimmed production staffs and increased sales departments due to surplus production. Internet sales often drive companies to add technical departments.
Changing Structural Types
Companies often rearrange business structure to follow a new business model. A small company with a functional organizational structure changes to a product division model once it has significant sales for a number of different products. Some businesses shift organizational structure to a regional model to assign local managers to different markets affected by regional factors. Other companies create a matrix grid to place the same key managers over all the various departments and divisions.
Companies commonly downsize to remain functional during a loss of revenue. Most companies draft a skeleton model of essential personnel, materials and facilities to remain in business. A CEO will close departments, drop product lines, lay off managers and sell facilities to keep a company afloat. Top managers reorganize business structure to meet the needs of the new organization at its smaller size. Remaining managers typically oversee more departments with fewer employees in each.
Corporate expansion demands the creation of new departments to accommodate new products or new facilities. Any company that opens new facilities to produce new products or house additional departments has to rearrange business structure to include the new staff. The new company managers must report to new upper level managers responsible for the new company branch facility. Companies often make changes in the basic organizational structure type to reassign the management throughout the expanded structure.
Socio-technical systems (STS) in organizational development is an approach to complex organizational work design that recognizes the interaction between people and technology in workplaces. The term also refers to the interaction between society’s complex infrastructures and human behaviour. In this sense, society itself, and most of its substructures, are complex sociotechnical systems. The term sociotechnical systems was coined by Eric Trist, Ken Bamforth and Fred Emery, in the World War II era, based on their work with workers in English coal mines at the Tavistock Institute in London.
Sociotechnical systems pertains to theory regarding the social aspects of people and society and technical aspects of organizational structure and processes. Here, technical does not necessarily imply material technology. The focus is on procedures and related knowledge, i.e. it refers to the ancient Greek term logos.
“Technical” is a term used to refer to structure and a broader sense of technicalities. Sociotechnical refers to the interrelatedness of social and technical aspects of an organization or the society as a whole.
Sociotechnical theory therefore is about joint optimization, with a shared emphasis on achievement of both excellence in technical performance and quality in people’s work lives. Sociotechnical theory, as distinct from sociotechnical systems, proposes a number of different ways of achieving joint optimisation. They are usually based on designing different kinds of organisation, ones in which the relationships between socio and technical elements lead to the emergence of productivity and wellbeing.