Factors Influencing Organizational Design

This resource considers how the external factors, internal factors, and stages of the business growth cycle influence organizational design.

Internal Environment

The internal environment is influenced by the jobs and the employees as they relate to those jobs. The employees' influence on the internal environment is directly related to their level of engagement, or job satisfaction. The job characteristics model, proposed by Richard Hackman and Greg Oldham in 1980, proposes that the right combination of skill variety, task identity, task significance, autonomy, and feedback can lead to high-quality performance, high internal motivation, and high satisfaction.

Skill variety: This is the degree to which the job requires a person to use multiple high-level skills. A department store greeter whose job consists of greeting customers and giving them a shopping cart demonstrates low levels of skill variety, whereas the employee who acts as a cashier, stocks shelves, and manages the inventory of outdoor furniture demonstrates high skill variety.

Task identity: This is the degree to which a person is responsible for completing an identifiable task from start to finish. A graphic designer who creates images for a website might have a low task identity. This is because the designer's work is only part of a larger whole; other designers and coders contribute their work to completing the website. However, a graphic designer who creates a brochure for a client from the idea phase to the final proof will have a high task identity.

Task significance: This is the degree to which a person's job affects customers or other people's work. A nurse handling the diverse needs of patients in the intensive care unit may score high on significance, whereas new nurses aiding in the same department may feel that they perform only busy work and feel a low level of significance.

Autonomy: This is the degree to which a person can decide how to perform his or her tasks. For instance, a grocery store clerk who is given a list of tasks to complete by the end of the day has greater autonomy than a clerk who is given that same list and told that the list needs to be completed in a particular order, with certain tasks needing to be done by certain times of the day.

Feedback: This is the degree to which people learn whether they are doing their job well. Feedback may come from other people, such as managers, peers, subordinates, and customers, or it may come from the job itself. For instance, a customer service representative might receive feedback from a supervisor, as well as from the customers he or she has tried to help.

Taken all together, the job characteristics model links the task itself to employee motivation. More specifically, a job that is challenging will improve employee motivation but a job that is boring and repetitive will hamper employee motivation.  To make a job challenging, managers can ensure the following:

  • There are a variety of tasks for the employee to complete.
  • The employee feels a sense of autonomy.
  • The employee is empowered to make certain decisions.