european journal of social sciences issn: 1450-2267 - EuroJournals

European Journal of Social Sciences – Volume 5, Number 3 (2007)
labor cost than required and this may then result in lost profits and inefficient utilization of employees.
Underestimates may result in underutilization and shortages of essential employees. Potentially missed
market opportunities may result and rival co-optation of market shares may ensue. In either case, the
realization of the firm’s expected competitive advantage may simply turn on the variability of its
forecast for human resources.
It becomes fairly evident that strategic human resource management should be a part of the
formulation stage of the firm’s strategic management process. Decision-makers must be provided with
human resource contingency plans and cost impacts as they relate to overall firm profitability and
efficiency. This also requires that the human resource manager must go beyond simply understanding
the firm’s human resource market (input side) and develop a working conceptual knowledge of the
forces affecting the firm’s competitive position in the product/service market and how this will relate
to the human resource market.
Table 1: Mechanistic and Organic Organizational Structures
Mechanistic Structures Result When an Organic Structures Result When an Organization makes
Organization makes these Choices
these Choices
• Individual Specialization • Joint specialization
Employees work separately and specialize in one Employees work together and coordinate their actions to
clearly defined task
find the best way of performing a task.
• Simple Integrating Mechanisms • Complex Integrating Mechanisms
Hierarch of authority is clearly defined and is the Task forces and teams are the major integrating
major integrating mechanism
mechanisms
• Centralization • Decentralization
Authority to control tasks is kept at the top of the Authority to control tasks is delegated to people at all
organization. Most communication is vertical.
levels in the organization. Most communication is lateral.
• Standardization • Mutual Adjustment
Extensive use is made of rules and SOPs to Extensive use is made of face-to-face contact to coordinate
coordinate tasks, and work process is predictable. tasks, and work process is relatively unpredictable.
• Status-Conscious Informal Organization • Expertise-Conscious informal organization
Employees protect their area of authority and Employees share their skills with others, and authority and
responsibility from others.
responsibility change over time.
Adapted from Jones (2004), p. 78
Uncertainty and Dynamism
One of the major forces shaping and complicating a firm’s demand for human resources arises from the
degree of market certainty and dynamism facing the business firm. These forces impact the derived
demand pathway by causing the firm to alter its organizational design and structure. Table I illustrates
the characteristics of mechanistic and organic organizational design and structures. Typically
mechanistic organizations tend to be hierarchical with many levels of management. Whereas organic
structures, associated with uncertainty and instability, tend to be more flattened and require a different
mix of skills, roles, and number of employees. Figure 2 illustrates changes in environmental forces
with regard to changes in organizational design and structure. At the end of the ranges the
characteristics of mechanistic and organic structures emerge much more distinctly. The choices made
in the design of work and interaction determines the resulting organizational form – ranging from
organic to mechanistic.
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