System 4 organizations are likely to be informal and flexible. Likert's model suggests that System 1 organizations should try to change and become more like System 4 organizations. Blindly adopting a System 4 design was no more a guarantee of success than was relying on the bureaucratic model. Most managers recognized that the most appropriate design for an organization depends on a number of variables. Technology, the set of processes an organization uses to transform various resources into products or services, can have a major impact on any of the structural components previously discussed.
Products are custommade or produced in small quantities.
Products are manufactured in assemblyline manner. Products are transformed from raw materials into finished goods through a series of machine transformations that change the composition of the materials. When Woodward classified organizations by technology, the organizations within each set had similar designs. Woodward thus concluded that different forms of technology are likely to necessitate different types of organization design. The environment of an organization comprises all the factors and conditions external to the organization that might affect the organization.