Organizations and Their Structure
Introduction
 |
| Picture 1: Organizational Structure Source: |
An organizations structure ensures the effective coordination of employees across departments, as it is a visual presentation of formal tasks assigned to individuals and departments, formal reporting relationships, including lines of authority, decision responsibility, and the number of hierarchical levels and span of managers’ control (Daft, 2014). Human Resource Management Perform a crucial role in designing the optimum Organizational structure to facilitate the operations. Organizations frequently use following structures to manage their workflow.
- Traditional Structure
 |
| Picture: 2 Source: (Management by Daft, 2016) |
The traditional organizational structure came into being as the organization grew, it became necessary to separate the ownership from the control. This laid the groundwork to be organized according to function and gave rise to a functional organization. The hierarchy is advantageous as it contains a set of policies, procedures, rules, and regulations with clear lines of communication and accountability. And it is ideal for a stable and predictable environment.
But the structure became ineffective as it is slow to respond and slow to come up with innovative solutions in an unpredictable environment (Pitts & Clawson, 2008). Even today, many organizations use this traditional Structure.
- Matrix Structure
The Matrix structure responds to the disadvantages of the Hierarchical structure. This structure combined functional expertise with a horizontal structural arrangement and managed with team principles by a project manager who had direct access to the top (Grubenmann, 2016).
 |
| Picture 3: Matrix Structure Source: (Management by Daft, 2016) |
Matrix structure facilitates rapid decision making and provides flexibility and agility by making the hierarchy more adaptable. The flow helps to maintain the organization’s competitiveness by being responsive to customer demand. The number of matrix structures can be managed at the same time catering to different market requirements. Once the project is completed a particular matrix structure can be wound up and the team members can return to their functional group.
An increase in the administrative cost, Unavailability of functional expertise, and lack of interpersonal skills to coordinate will be limitations of this model. When organizations must go with two or more projects they use Matrix structure.
- Flexible Organization
The Flexible Organization model was originated in 1984 by John Atkinson of the Institute of Manpower Studies. He suggested, to face market volatilities organizational structures require increased flexibility.
 |
| Picture 4: Flexible Structure Source: (Diagram derived from Ritson, 2011) |
According to the theory, employees are organized into two main groups,
The core group: refers to the internal employees who provide functional flexibility to the organization. They are provided with long-term security, as the organization invests heavily in training expenditure in this sector. Core-worker cooperation is expected for implementing and adapting to change.
The peripheral group: consists of secondary or part time workers, who are often less skilled and less experienced. Their skills are easily available in the labour market and can be sourced at short notice. They are providing numerical flexibility to the firm. Their service only be required at particularly task-heavy periods of the week (Bussiness Balls, 2020).
This model demonstrates the areas in which the company can be streamlined using proactive approaches. It provides a competitive edge over the market, as it helps to match business volume with the skill level of staff to their requirement at a lower cost.
However, this model carries a degree of risk as it is proactive in nature, if they become unable to hire the staff from the labour market as predicted their production can be dropped, and will not be able to face the rivals. In today’s context, Garments and other factories use this model when there are heavy tasks are to be completed within a limited period.
- Horizontal Structure
 |
| Picture 5: Horizontal Structure Source: (Management by Daft, 2016) |
Horizontal organizations consist of few layers or just one layer of management. This means that the “Chain of Command” from top to bottom is short by providing a limited number of layers and the “span of control is wide” which means the number of employees that each manager is responsible to keep attention is relatively high.
Strategically this organizational structure is highly responsive to creative and rapid innovative product and service delivery to gain competitive advantage. The coordinating center consists of key managers who are pushing teams of relevant expertise (core competencies) into innovative strategy. The free flow of communications, and not being bound by hierarchical positions and command-control authority, the possibility of expert rotation are the other benefits of this structure.
Individual employees need to be often motivated to maximize their profit this will not be possible in a flat structure since fewer leaders are there to give them individual attention (Dr. Rishpal, 2014). Due to its limitations small organizations with few employees effectively using this structure.
- Virtual Network Organization
 |
| Picture 6: Virtual Network Organization Source: (Author Developed, 2021) |
Virtual Organizations are designed on the principle of outsourcing and can be considered as a temporary network of independent institutions, enterprises of specialized individuals that through the use of Information and Communication Technology, spontaneously unite to utilize an apparent competitive advantage (Sieber & Griese, 1998). The BPO’s are the best example of the virtual organizational structure.
Advantages Virtual organizations include achieving the Global competitiveness as it presence in the world 365/24, Less administrative overhead, and a Flexible workforce.
Disadvantages include diffusion of hands-on-control, problems in one network partner that can affect the overall performance of the virtual network, inability to rely on employee loyalty.
Conclusion
The importance of designing organizations for greater effectiveness, flexibility, and adaptability has become a growing concern as the developed world attempts to reshape its corporations to deal with and to take advantage of opportunities and threats created by increasing competition, emerging technologies, innovation and creativity (Morozenko, 2018). Different structures emerged by addressing the limitations of each. Depending on the industry and workforce and the volatility of economic conditions the effectiveness of the structure will vary. Accordingly HR Department together with Managers must decide the best fit Organizational structure that is effective for the Organization under each circumstance.
Video 1: Organizational StructureReferences
Allen, K., 2018. Trees, Pyramids, and
Organizational Charts. [Online]
Available at: https://kathleenallen.net/trees-pyramids-and-organizational-charts/
[Accessed 26 August 2021].
BusinessDictionary,
2016. What is organizational structure?. [Online]
Available at: https://www.youtube.com/watch?v=wO_-MtWejRM&ab_channel=BusinessDictionary
[Accessed 25 August 2021].
Bussiness
Balls, 2020. Busunessballs. [Online]
Available at: https://www.businessballs.com/organisational-culture/flexible-firm-model/
[Accessed 23 July 2021].
Daft, R. L.,
2014. In: Management Twelfth Edition. s.l.:Cengage Learning.
Dr. Rishpal,
2014. European Journal of Business and Management. Analytical Comparison of
Flat and Vertical Organizational, Volume 6.
Grubenmann,
S., 2016. ReaserchGate. [Online]
Available at: https://www.researchgate.net/publication/294120670_Matrix_Organisation
[Accessed 23 July 2021].
Morozenko,
A., 2018. Researchgate, Reflex-Adaptive Organizational Structure in the
Implementation of Large-Scale Projects. [Online]
Available at: https://www.researchgate.net/publication/329262003_Reflex-Adaptive_Organizational_Structure_in_the_Implementation_of_Large-Scale_Projects
[Accessed 23 July 2021].
Pitts, T.
& Clawson, J. G., 2008. ReasearchGate. [Online]
Available at: https://www.researchgate.net/publication/228144159_Organizational_Structure
[Accessed 23 July 2021].
Sieber, P.
& Griese, J. P. S. a. J. G., 1998. Organizational Vitualness. [Online]
Available at: https://www.academia.edu/758770/Characteristics_of_virtual_organizations
[Accessed 23 July 2021].
Organisational structure is very important for almost all the operations. Delegation of authority, Decision making and all the aspects requires it to succeed. Therefore I agree towards your view on strong organisational structure.
ReplyDeleteThankyou for the feedback Gangani.
DeleteHere we should discuss the organization structure on HRM perspective. Organisation structure means the systematic arrangement of people working for the organisation in order to achieve certain goals. HR's organizational structure matters because it is the function's framework, aligning resources with priorities defined in the business strategy, and embodying the organization's culture. The structure directly impacts the company's ability to attract, engage and retain top HR talent.
ReplyDeleteThankyou for sharing your view Oshada.
DeleteA proper organizational structure is extremely important for any organization to have a proper systematic control over their employees, as such I personally think this is an extremely relevant topic to all in order to have a proper structured organizational hierarchy. Overall a great article Rukmali!
ReplyDeleteThankyou for the comment Jude.
DeleteOrganizational structure is a powerful determinant of organizational behavior. Organizational structure is only one of many aspects of organizational design. Other aspects would include the nature of an organization’s leadership, the various systems operating in it, and organizational culture. Organizational structure reflects the way in which work in an organization is divided. Thanks for sharing Rukmali.
ReplyDeleteThankyou very much for the comment Harsha.
DeleteThis is a very interesting article Rukmali, lot of knowledge/ information in it. Yes as correctly stated managers must decided the best fit for the organization. Most importantly law and order should establish in the organizational structure . Since the market is volatile management should frequently observe the changes and should make adjustments accordingly. Nice article Rulmali
ReplyDeleteThankyou very much for the comment Tharindu.
DeleteThis article discusses and categorizes organizational structures. Organizational structures can be tall, with multiple tiers between entry-level employees and top management. They can also be flat, with few levels between employees and management. The main purpose of a structure is to define the company's hierarchy. This way, everyone knows who to report to. Given the importance of organizational structure in various aspects of business, managers should take their time choosing one. This article describes the main types of organizations.
ReplyDeleteThankyou for the valuable feedback Kanchana.
DeleteOrganizational structure is very important for a company that functions to assisting in the achievement of organizational goals Assisting in the creation of job descriptions for employees Taking a look at workloads, Assisting with the company's employee pay system calculation Assisting with resource planning and allocation for the company Defining the lines of coordination between functions, as well as the division of authority and responsibility.
ReplyDeleteThankyou for the valuable feedback Pradeep.
DeleteOrganizational charts likewise appoint liability, put together the work process and ensure significant errands are finished on schedule. Employees will be more engaged and consequently more useful, and your association will profit from better correspondence and work all the more effectively. Organizational structure gives use and can assist with upgrading your working exhibition. Independent ventures advantage from influence systems and need a structure similarly as much as huge associations. Incorporate structure into the business today and they'll graph their own future achievement.
ReplyDeleteThankyou for the valuable feedback Mihirani.
DeleteOrganizational structures define a specific hierarchy within an organization. A successful organizational structure defines each employee's job and how it fits within the overall system. This structuring provides a company with a visual representation of how it is shaped and how it can best move forward in achieving its goals and meet its objectives.
ReplyDeleteAs discussed in the article Rukmali, according to the industry, workforce, volume and economic conditions structure will be varied in an organization.
Organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization and it determines how information flows between levels within the company and gives a better picture about the organization to its stake holders. Also the good structure will expose the span of control which is easy to manage the organization.
ReplyDeleteThankyou for the valuable feedback Amjad.
DeleteAn organizational structure is a system that outlines how certain operations should be conducted to accomplish an organization's objectives. It enables teams to work together on activities within their specific roles. These actions, which include rules, roles, and responsibilities, govern how information moves between tiers inside the firm.
ReplyDeleteThankyou for the valuable feedback Nadeeshan.
DeleteImplementing a proper organizational structure can be very useful to a company. The structure not only describes a company's ladder but also permits the organization to design the pay structure for its employees. By Implementing a proper organizational structure, the firm can conclude salary rankings and ranges for each position.
ReplyDeleteThankyou for the valuable feedback Nadun.
Delete