IRHR1001 Essay 2 - Question 3
Is there an ideal structure for all organisations?
Since there are organisations, the respective management has to decide how to divide its work, how to coordinate all work-related activities and how to control these activities to ensure that goals are achieved. Ever since these issues, people discussed the question whether there is an ideal structure for all organisations!? This essay will show various influences on such a choice and that it is not possible to define an ideal organisation structure. However, to answer this question, it is necessarily to define the words organisation structure, organisation design, and to consider the various factors that impact upon it.
Therefore, an organisational structure is the formal framework by which job tasks are divided, grouped and coordinated (Robbins, 2004). These formal arrangements are closely related to an organisational design. By developing or changing an organisation’s structure, managers are engaged in organisational design. This process involves decisions about six key elements: work specialisation, departmentalization, chain of command, span of control, centralisation and decentralisation, and formalisation (Daft, 2004). Both organisational structure and organisational design are influenced by many factors, which led to a multitude of different structures. One of them is the bureaucratic model of organisations.
Although its roots go back several centuries, it is most often associated with the work of Max Weber, a German sociologist. He was one of the few people who tried to describe an ideal approach to structuring organisations based on a rational set of guidelines and procedures (Weber, 1983). Furthermore, Weber drew attention to “the way in which more personal styles of administration, centered on the king were supplanted by rational/legal organisational structures” (Colebatch, 1993). Thus, the bureaucracy was meant to organise the work of many individuals and centralise orders without having direct contact to each person. Another common organisation is the matrix. It is created by overlaying product-based departmentalisation onto a functional structure. This type of organisation is used in the aerospace industry, where projects are technically complex. Hundreds of subcontractors, located throughout the whole world, are involved and therefore, organised by this matrix structure. A key factor for choosing a matrix is the need for a “precise integration” and “control across many sophisticated functional specialties and corporations” (Woods, 2010). Like these key factors were significant to establish a matrix organisation in the aerospace industry, any organisational structure is influenced by factors and chosen for a reason.
However, there are two main generic models of organisational design. One of these models is the mechanistic organisation. It is a rigid, non-flexible, and tightly controlled structure (Wood, 2010). Its main characteristics are a high specialisation, narrow spans of control, a clear chain of command, centralisation, and high formalisation (Barney, Griffin, 1992). In the mechanic structure, work specialisation creates jobs that are simple, routine and standardised. Mechanistic types of organisational structures tend to be efficiency machines, well oiled by rules, regulations, routinisation, and similar controls. By using “appropriate tools and techniques” or “diagnose and correct factors” they are showing the typical downward communication and formal hierarchy of authority (McDonald’s, 2010). In direct contrast to this form of organisation is the organic organisation, which is as highly adaptive and flexible as the mechanistic organisation is rigid and stable. The flexibility allows it to change rapidly as needs require. The organic organisations are likely to be decentralised, have a wide span of control and intricate communication. Employees are highly trained and empowered to handle diverse job-related problems (Barney, Griffin, 1992). The best examples for organic organisations are ‘Virgin’ or ‘Google’. Google, for example, describes its employees as “hands-on contributors”. Moreover they want them “being comfortable in sharing ideas and opinions”
(Google, 2010). The high level of skills and training make formalisation and tight managerial controls unnecessary, which shows that there cannot be an ideal organisational structure. To underline this there can be shown several factors, which influence the organisational design in different ways.
The four contingency variables on which an appropriated structure depends are the organisation’s size, technology, environment, and strategy (Wood, 2010). This paragraph will show the influence of each on the choice of a design and how they favour the mechanistic or organic organisation. An organisation’s size is often defined by its number of employees. The more individuals in an organisation the more interpersonal connect between them and the more complex it gets (Robbins, 2000). Advanced communication methods and policies are needed and the organisation is likely to shift towards a mechanistic structure. Large-scale complex organisations and bureaucracy are often regarded as synonymous (Geeraerts, 1984). Many authors described the size as the greatest single influence on the extent to which organization develop bureaucratic forms of organizational structure. Thus Weber commented on the “role of sheer quantity as leverage for the bureaucracy cratisation of a social structure” (Weber, 1958 cited in Child, 1973). Another supporter was the French management theorist, Henri Fayol. He drew organisation charts, which “enabled the organic whole, departments and lines of authority to be grasped at a glance better than could be done by lengthy description.” Moreover, Fayol maintained -inconsistent to other theorists- that this mode of representation is suitable for all types of concern, large establishments as well as small, expanding or declining” (Fayol, 1949). However, larger organisations can be more efficient, with a greater production of goods and more services through repetition. This causes more need to break tasks down into parts, to allocate authority and to establish more coordination (Hanson, 2004). These characteristics are typical for large mechanistic organisations with more standard operating procedures, more rules, more regulations and a greater degree of decentralization. Beside this, the size of an organisation is also related to its performance. When measured in terms of the number of employees, the size is “positively related to absolute levels of organisational performance” (Gooding and Wagner, 1985 cited in Carillo, 1991). Of course the organisation’s size and scale are not constant. Some small businesses disappear soon after they are formed, others remain small, and again others become organisational giants, like ‘Apple Computers’ or ‘Xerox’. Established as a small organic organisation they became large business with thousands of employees. Although these type businesses are still acting organic, and therefore an exception of the main theories, it proves the importance of an organisational size relating to its structure.
In contrary to Weber’s theory, others have argued that an organisation’s technology is more salient influencing on a structure than its size (Thompson, 1967 and Aldrich, 1972 cited in Child, 1973). However, the second contingency variable is also a very important for an organisational structure or design. Every organisation uses some form of technology to convert its inputs into outputs. To reach its objectives, the organisation combines equipment, materials, knowledge and experienced individuals into certain types and patterns of activities (Davidson, Griffin, 2000). Joan Woodward’s research was the first major attempt to view organisational structure from a technological perspective and she demonstrated that structures adapt to their technology (Wood, 2010). She studied the relationship between the factor and the appropriated structure by defining three basic types.