Org Structure

                 Organisational Structure

An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.

An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs.

Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities.

Factors affecting organizational structure:

      The environment: The quicker the environment changes, the more problems      

                                face managers.

                                     •          Structure must be more flexible when environmental change   

                           is rapid.

                      –         Usually need to decentralize authority.

      Strategy:           Different strategies require the use of different structures.

                                  •        differentiation strategy needs a flexible structure, low cost    

                         may need a more formal structure.

                                  •         Increased vertical integration or diversification also requires 

                         a more flexible structure.

                                                                                                                                                                                    

Technology:       The combination of skills, knowledge, tools, equipment,   

                         computers and machines used in the organization.

                                  •          More complex technology makes it harder for managers to       

                         regulate the organization. Technology can be measured by:

                 –         Task Variety: new problems a manager encounters.

                 –         Task Analyzability: programmed solutions available to a  

               manager to solve problems.

                                 •          High task variety and low analyzability present many 

                         unique problems to managers.

                –         Flexible structure works best in these conditions.

                                •          Low task variety and high analyzability allow managers to                  

                        rely on established procedure.Human Resources: the final  

                        factor affecting organizational structure.

                                •         Higher skilled workers who need to work in teams usually need   

                        a more flexible structure.

                                •          Higher skilled workers often have professional norms (CPA’s,  

                        physicians).

  

                       Human Resources: the final factor affecting organizational structure.

                                •          Higher skilled workers who need to work in teams usually need  

                        a more flexible structure.

                                        •          Higher skilled workers often have professional norms (CPA’s, 

                             physicians).

So, managers must take into account all four factors (environment, strategy, technology and human resources) when designing the structure of the organization.

Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organization’s actions.

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Present Trend: Organizational circle: moving back to flat

The flat structure is common in small companies (enterprenerial start-ups, university spin offs). As the company grows it becomes more complex and hierarchical, which leads to an expanded structure, with more levels and departments.

In general, over the last decade, it has become increasingly clear that through the forces of globalization, competition and more demanding customers, the structure of many companies has become flatter, less hierarchical, more fluid and even virtual.

Significance

Without a formal organizational structure, employees may find it difficult to know who they officially report to in different situations, and it may become unclear exactly who has the final responsibility for what. Organizational structure improves operational efficiency by providing clarity to employees at all levels of a company. By paying mind to the organizational structure, departments can work more like well-oiled machines, focusing time and energy on productive tasks. A thoroughly outlined structure can also provide a roadmap for internal promotions, allowing companies to create solid employee advancement tracks for entry-level workers.