PLEASE RESPONDAND ANSWER EACH OF THE FOLLOWING QUESTIONS OR POST STATEMENTS. MUST BE 150 WORDS (PLEASE), WRITE IN 3RD PERSON.ONLY ONE REFERENCE CAN BE USED FOR EACH ANSWER.
DQ 1. Reflecting on the evolution of organizational design, which theorist/theory has had the most significant impact on contemporary organizational design? Why?
DQ 2. Discuss the elements of a mechanistic, organic, or contemporary design. Which contributes to organizational effectiveness the most? Explain.
How Organizations Are Structured
Introduction
The study of organizations is completed on an individual, group, or organizational level. Organizational behavior is the study of individuals and groups in organizations, whereas organizational theory, structure and process is the study of the functioning of entire organizations within their environments. This includes the structural designs of organizations that describe task and authority relationships as well as how people coordinate their actions to achieve organizational goals. An analysis oforganizational culture, change, and leadership is also central to a study of organizational theory.
The History of Organizations
Organizations exist to create value for stakeholders. The history of organizations, as a foundation for modern society, began during the Classical Period in the late 1800s and early 1900s. With the dawn of factories and the Industrial Age, businesses faced new challenges and opportunities related to specialization and the division of labor. During this era, the type and scale of work changed as society moved from an agrarian to an industrial model. As early as 1898, Frederick Winslow Taylor, the father of scientific management, studied actual work activities by conducting time and motion studies at Bethlehem Steel with workers who loaded and unloaded railway cars. Taylor's focus was on efficiency as he studied movements and tools to increase productivity. Organizations during this period adopted a hierarchical structure in which managers directed workers, and workers performed the tasks that they were directed to perform.
Henri Fayol, a French industrialist and contemporary of Taylor's, expanded Taylor's focus and published his 14 Principles in 1916. Taylor's work introduced an emphasis on the administrative functioning of organizations, which established the foundation for modern organizational management and design. Fayol's principles included unity ofcommand, division of work, authority, discipline, unity of direction, subordination of individual interests to the general interests, remuneration, centralization, scalar chain, order, equity, stability of tenure of personnel, initiative and espirit de corps (John & Gupta, 2012). The focus of scientific management and Fayol's principles was on work with little attention to the motivation or satisfaction of workers.
In the 1930s, Elton Mayo conducted the famous Hawthorne Studies in which he focused on the motivation and satisfaction of workers. Mayo found that increased worker satisfaction resulted in increased productivity. The hierarchical and bureaucratic structural designs worked well during the Industrial Revolution and were used extensively in organizations into the 1980s, when organizations faced new challenges with increased competition, globalization, and other changing contingency and environmental factors. In response to these changes in their environments, organizations began to focus on flattening levels of authority, increasing speed to market, reducing levels of staff, and providing timely and quality responses to customers.
Organizational Structures
Organizational structures and designs are aligned with the organization's purpose and goals. Organizational structure refers to such aspects as the degree of formalization and specialization, hierarchy of authority, centralization of decision making, and professionalism of the organization. Organizational structure defines formal reporting relationships and the manner in which individuals are divided into departments. Other contextual dimensions that are important to organizational structure are size, organizational technology, the environment, organizational goals and strategy, and organizational culture. In a related manner, organizational design establishes how individuals and departments will communicate, coordinate their efforts, and integrate to achieve the organization's goals.
Vertical Structures
Mechanistic organizational structures are characterized by vertical design with multiple, well- defined hierarchical layers. Mechanistic organizations are often structured with divisions or functions, such as finance, marketing, human resources, and operations. These organizations place a premium on efficiency. Mechanistic structures use centralized decision making by a small number of individuals, have formal procedures to deliver results, and allow little autonomy for employees, which often leads to low employee engagement and morale.
Functional structures are common in vertical organizations. In a functional structure, activities are arranged by function. For example, all of the sales employees in a functional organization would be combined in one department with a leader overseeing the sales function. This structure contributes to depth of knowledge in each area. However, critics refer to the functional structure as having silos, which interferewith horizontal coordination and communication and create a lack of knowledge of the overall organizational goals. The functional structure also is slow in responding to environmental changes, has slow decision-making, and yields low levels of innovation.
Also common in a vertical organization, a divisional structure is grouped by strategic business unit. In a divisional structure, the separate divisions are based on organizational outputs by product, services, projects, programs, or profit centers. In a divisional structure there are functional groups within each division. There is coordination across functions. Each division is smaller with decentralized decision-making and is more flexible in adapting to the environment. A disadvantage of the divisional structure is that there are reduced economies of scale as resources need to be duplicated for each division. Coordination between divisions can also be challenging.
A geographical structure groups divisions by the geographical locale of the organization's customers and is another form common to the vertical structure. Apple Computer and McDonald's are examples of organizations grouped by geography. A geographical organizational structure can address the distinct needs of customers from different parts of the world. There is coordination within the geographical region rather than across regions or with the central office.
Mixed Structures
When an organization finds that the functional, divisional, and geographical structures do not support the organization's goals, it may select a matrix structure, which combines horizontal and vertical structures. In the matrix structure, product and functional managers have equal authority and employees report to both. This structure is able to share resources across product lines, provides depth of knowledge, enables innovation, and supports coordination and collaboration in horizontal and vertical directions. In a matrix organization there may be conflicts related to dual reporting and unequal balance of power between product and functional managers.
Horizontal Structures
Organic organizations are flatter and more flexible than mechanistic organizations. With fewer layers of formal management, organic organizations involve more individuals in decision-making, offer more autonomy for employees resulting in a higher level of employee engagement and higher morale. Organic structures are effective in organizations that rely on learning, innovation, and flexibility.
Organizations are increasingly becoming more horizontal with teams from different functional areas forming workgroups. Change in customer and employee demands, technology, virtual organizations, value placed on intangible rather than intangible assets, diversity, and global competition are necessitating new approaches to organizational structure and design.
Contemporary Structures
Contemporary organizational structures include open systems, which interact in various ways with the environment. Chaos theory recognizes an ever-growing, dynamic, non-linear, natural environment, and follows an organic design to respond with flexibility. For many organizations, change has become a constant, and flexibility is essential to success.
Conclusion
Organizational structure is effective to the extent that it supports the organization's purpose and goals. Organizational structure and design contribute to the organization's ability to achieve efficiency and effectiveness, to sustain itself and to grow, and to create value by meeting the needs of all stakeholders in the organization.
References
John, S., & Gupta, S. (2012). Organizational theory and design.[Kindle version].