Internal performance features of UK building societies and their effect on organizational structure
Titel:
Internal performance features of UK building societies and their effect on organizational structure
Auteur:
Ferguson, Charles McKillop, Donal G.
Verschenen in:
Applied financial economics
Paginering:
Jaargang 2 (1992) nr. 4 pagina's 199-204
Jaar:
1992-12
Inhoud:
A predictive model is offered based on the relative importance of the variables of size, efficiency, labour costs, market share, profit, liquidity, growth and branch structure as they affect the transition from mechanistic, functional organizational structures to quasi-divisional structures within UK building societies. The key changes that have taken place in the UK building societies sector, particularly as a result of the de-regulation of financial services in 1986, are described. The linkage between the changed market environment and the need for the adoption of market-orientated organizational structure is discussed. The role of internal performance features with UK building societies and their effect on the adoption of 'new form' market orientated organizational structures is used as the major focus. Using a rigorous definition of 'new form' organization structure based on the increased use of new products, divisionalization and delegation, and the decreased use of hierarchy, the authors found - using data obtained from a major survey they conducted of UK building societies - that 26 out of 72 building societies could be classified as having entered into this 'new form' organizational structure. A dichotomous binary choice variable was utilized to identify the statistically significant characteristics of those societies most likely to be involved in adopting 'new form' organizational structures in the future. From an initially wide range of factors, the use of a probit model reveals that the dominant statistical factor mitigating against organizational re-structuring is growth in employee numbers. The results of the study shows that the 'inertia' created by this factor is outweighed by the combined positive force of factors such as the relative price of labour, profit growth and absolute administrative cost and asset size in creating the likelihood of organizational re-structuring. The task of (organizational) research is to build knowledge through the use of scientific method by more exactly specifying the relationship between contingencies structure, performance and other variables. (Donaldson, 1985)
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