Answer to Question 1
The three contingencies that factor into the design of organizational structure are the nature of the organization's environment, advances in technology, and the characteristics of an organization's human resources.
In general, the more quickly forces in the environment are changing, the greater the uncertainty within it. Therefore, the problems of quickly accessing resources the organization needs to perform well (capital, plants, and equipment) will also be greater.
Technology is the combination of skills, knowledge, tools, machines, computers, and equipment that are used in the design, production, and distribution of goods and services. As a rule, the more complicated the technology that an organization uses, the more difficult it is to regulate and control it.
A third important contingency affecting an organization's choice of structure is the characteristics of its human resources and the nature of the employment relationship. In general, the more highly skilled an organization's work force, the more people are required to work together in groups or teams to perform their tasks.
Answer to Question 2
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