The organizational structure affects how people and groups behave in an organization. It endows with a framework that shapes the attitudes, behaviors, and performance of the employees. Organizations need to develop a structure that allows them to manage individuals and inter group relations effectively. Differentiation and integration are the basic building blocks of any organizational structure.
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The organizational structure is the most appropriate and recognized system of reporting associations on the job. It brings together the employees of the organization and motivates them so that they can work simultaneously, with full dedication to attain organizational goals. To devise an organizational structure that facilitates employees to perform their work successfully and efficiently is the real challenge for managers.
The important classical approaches to organizational structures include Max Weber’s concept of an ideal bureaucracy that helped in shaping modern bureaucracies, Henri Fayol’s principles of organizing which introduces concept of unity of command and unity of direction and Rensis Likert’s approach to organizational design, the human organization.
Organizational behaviour refers to the study of an organization, human behavior in that organizational setting and the interaction between these two. Within every organization exists formal and informal framework of policies and rules, lines of authority and communication and allocation of responsibilities. All of these factors, combined, known as the organizational structure. (Wilson 2004, p.159)
The organizational structure determines that how the parts of an organization fit together. It is the basic need of every organization in order to coordinate its employees’ actions, and achieve organizational goals. Every organization creates such a structure for itself in which employees can get more done when they work together than they could when working separately. For example, if two or three females start stitching clothes on a commercial basis, they might not need an organizational as they can make whatever they want and it will be unique. However, if they want to make a significant profit then they have to order material in bulk, fill large quantity orders from clothing stores and put out a catalog. For any these activities this small organization needs a structure otherwise this group would never know how much material to buy, how many people to hire, or whether they could to meet overall demand. (Elwell )
Basics of Organizational Structure
Organizational structure is a system of authority, reporting and task relationships that characterize the form and purpose of activities in any organization.
There are two basic functions of every organizational structure:
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- The first one is effective distribution of tasks and labor.
- The second one is the creating coordination between different tasks in order to attain the preferred output. (Wilson 2004, p.91)
This concept was used by Henry Ford in early twentieth century. He applied this concept in an assembly line where all the workforce of Ford was given some particular task, which was recurring. Ford was able to manufacture cars at the speed of one after every ten seconds using comparatively less experienced staff by means of converting large jobs into small and identical errands. The term work specialization is used to explain the extent to which organizational tasks are alienated into similar, small jobs. The fundamental nature of work specialization explains that a single person must not carry out the complete work rather it is divided into steps, and every step is completed by a separate person. Individual employees focus on working on a division of an activity more willingly than working on the complete activity. (Mullins 2007, p.102)
Mechanistic types of organizational structures have a tendency to work effectively by following rules, regulations, uniform responsibilities, and related controls. This organizational design makes an effort to curtail the blow of conflicting behaviors, verdicts, and indistinctness for the reason that such human qualities are perceived as unproductive and incoherent. More or less each and every great firm and governmental organizations include no less than a few of these mechanistic characteristics even if no unadulterated type of a mechanistic organization subsists in actuality. Structure of the mechanistic organization is firm as well as unwavering. The organic organization is agile and is capable of modifying speedily whenever required by the situation. Even though organic organizations encompass division of labor, still the work that employees carry out is not consistent. Staff is well qualified plus authorized to manage diverse work behaviors along with troubles. Employees working in organic type organizations need least official set of laws and negligible direct control. They possess excellent levels of expertise along with training moreover the help offered by other team members create formalization plus rigid executive controls needless. (Wilson 2004, p.91)
Elements of Organizational Structure
- Span of Control
Departmentalization is way by which an organization combines divided tasks and allocates these tasks to the work groups. Span of control refers to the number of employees reporting to a manager. Formalization is the level to which rules and procedures dictate the jobs and activities of employees. Centralization is an aspect of organizational structure in which almost all the important decisions made at the top level. (Mullins 2007, p.51)
Common Organizational Structures
- Simple Structure: A structure distinguished by a small amount of departmentalization, broad spans of control, power centralized into a particular individual, along with the modest formalization.
- Bureaucracy: A structure amid extremely schedule working tasks which are realized by means of specialization, a great deal of official set of laws and regulations, everyday jobs that are collected into functional departments, central power, constricted spans of control, along with decision making that pursue the chain of command.
- Matrix Structure: A structure that produces twofold lines of authority as well as merges functional and product departmentalization.
The organizational structure is the most important factor in deciding the leader’s ability to take effectual decisions because it assigns responsibility and authority, and also endow with specialization of tasks, hence easing the process of decision making.
The Ideal Bureaucracy Approach
Max Weber put forward the concept of ideal bureaucracy according to which the organization is based on hierarchy of authority and firm observance to rules and procedures that presents constancy, power, and expected end results. (Elwell)
According to Weber, this model would provide the most proficient system for managing big organizations. (Cunliffe 2008, p.98)
He was right in his thinking that this model would ascertain order and predictability within the organization but what he did not realize was that excess of predictability would be as detrimental as disarray. If there is no room for employees to be creative and innovative and to take necessary action according to the demand of the situation then this same bureaucratic structure can wipe out the organization. (Cunliffe 2008, p.121)
The major characteristics of Max Weber’s Ideal Bureaucracy are:
|Rules and Procedures||Employee duties are clearly defined; if enforced, rules make employee action controlled and predictable|
|Division of Labor||Tasks are clearly divided among employees who have the competence and authority to carry them out.|
|Hierarchy of Authority||Everyone reports to the supervisor of the next level above, creating the chain of command. Everyone except the top person reports to a single higher ranking person.|
|Technical Competence||Employee selection and promotion are based on technical competence and training. This ensures that individuals are qualified to do their jobs and enhances predictability and control. It eliminates favoritism and nepotism from selection and promotion process.|
|Separation of Ownership||Employee should not share in organization’s ownership. This policy encourages employees to make decisions to benefit the organization rather than themselves.|
|Rights and Property of the Position||The rights and controls of the organization’s property belong to the position rather than the person holding that position.|
|Documentation||To provide a continuous record of the organization’s activities, all administrative decisions, rules, and actions are detailed in writing.|
By having a critical look at Weber’s model it is clearly understood that even though it make the things and procedures quite predictable, still it is not very acceptable by the managers because it cutting down the employees ability of becoming a unique individuals with a unique set of ideas and causing hindrance in effective decision making on the part of managers as well.
The real life example of this approach can be taken from most of the government organizations, where employees have to follow pre-set rules, regulations and systems of performing tasks and they can not work uniquely. (Elwell)
Fayol’s Principles of Organizing Approach
Henri Fayol’s principles of organizing provided the framework for modern organizational structure and task coordination. (Miner 2007, p.59)
Fayol’s classic principles of organizing provide great help to the leaders in taking effective and timely decisions. Each of the fourteen principles works towards making decisions more precise. (Miner 2007, p.74)
Floyd’s fourteen principles are:
|1. Division of work||Individuals and managers work on the same part or task|
|2. Authority and Responsibility||Authority – right to give orders; power to demand obedience; goes with responsibility for reward and punishment.|
|3. Discipline||Obedience, application, energy, behavior. Agreement between firm and individual|
|4. Unity of command||Employee gets instructions from one superior.|
|5. Unity of Direction||One head plus one plan for activities with the similar objective.|
|6. Subordination of individual interest to general interest||Objectives of the organization come before objectives of the individual.|
|7. Remuneration of personnel||Pay should be fair to the organization and the individual.|
|8. Centralization||Proportions of discretion held by the manager compared to that allowed to subordinates.|
|9. Scalar chain||Line of authority from bottom to top.|
|10. Order||A place for everyone and everyone in their place.|
|11. Equity||Combination of kindness plus justice. Equality of treatment.|
|12. Stability of tenure of personnel||Stability of managerial personnel; time to get used to work.|
|13. Initiative||Power of thinking out and executing a plan.|
|14. Esprit de corps||Harmony and union among personnel is strength.|
Among these fourteen principles, those which play a vital role in letting leaders make efficient decisions are unity of command and unity of direction. Unity of command means that employees will get all the orders from just one person and unity of direction means that those tasks which have same objectives should be dealt with by one supervisor. (Miner 2005, p.301)
Criticism on Fayol’s principle of organizing is same as on Weber’s model that it does not take into account individuality and dissimilarity of employees. (Cunliffe 2008, p.106)
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The real life example of this approach is any consultancy. In consultancies employees takes instructions from one person and reports to the same.
Human Organization Approach
The human organizational structure is developed by Rensis Likert. He based this system on supportive relationships, participation and overlapping work groups. According to Likert, supportive relationships are needed by the employees so that they can feel important and worthwhile. Similarly, the work group needs participation in those decisions by which they directly or indirectly effected in so that group members feel valuable. Likert also believes that overlapping working groups where managers linking the groups should be implemented in the organizations.
(Mullins 2007, p.706)
According to Likert the horizontal and vertical overlap of work groups brings out the best for the organization and helps the leaders in efficient decision making.
Critics articulate that Likert has gone to the contradictory extreme from Fayol and Weber because he focuses a great deal on individual employees and groups but not enough on structural troubles. (Mullins 2007, p.699)
The most common real life examples of human organization approach are most multinational organizations where employees are able to discuss and share there ideas and thoughts through both vertical and horizontal communication.
Strengthening organizational Structure
- Proper and official announcement must be made about the organizational viewpoint, mission, vision, values, and resources used meant for employing, assorting and socialization.
- Presence of a flawless plan of substantial freedom, work atmosphere, in addition to edifice.
- Premeditated role modeling, training plan, and coaching by managers and supervisors.
- Unambiguous rewards including and clear cut promotion criteria.
- Specific organizational goals and the allied decisive factors must be used for recruitment, selection, expansion, promotion, layoffs, and retirement of employees.
The structure of an organization is there to offer a direction and locus of decision making and synchronization and moreover for providing a system designed for reporting and communications. (Miner 2005, p.106)
By analyzing all the aspects discussed above it can be suggested that an effective organizational structure should be moderate towards both employees and management. It is basic criteria for a successful organizational structure.
Cunliffe, A 2008, Organization Theory, SAGE Ltd.
Elwell, F, Characteristics of Bureaucracy, Rogers State University. Web.
Miner, J B 2005, Organizational Behavior II: Essential Theories of Process and Structure, Newedn, M. E. Sharpe.
Miner, J B 2007, Organizational Behavior 4: From Theory to Practice, M. E. Sharpe.
Mullins, L J 2007, Management and Organisational Behaviour, 8th edn, Financial Times.
Northouse, P G 2006, Leadership: Theory and Practice, 4th edn, Sage Publications, Inc.
Wilson, F 2004, Organizational Behaviour and Work: A Critical Introduction, 2nd edn, OUP Oxford.