Organisational Structure and Culture - Essay Example

Organisational Structure and Culture Abstract This complete paper covers the organisational structure forms adopted by organisations and the different types of organisational cultures that result from the structures the organisations adopt. It is also aimed at answering why organisations are quitting the old forms of organisational structures and embracing modern forms. The structure that an organisation adopts results to behaviours and activities of the workers in the firm, that is, the organisational culture. Organisational culture has also been discussed to analyse the impact and importance it has on organisations and their structures. Introduction This paper outlines the traditional forms of organisational structures that were used before the development of newer and better organisational structures. It also reveals the various forms of organisational structure and culture and how the two differ from each other. Early theorists such as Fayol and Taylor believed that organisational structure was relevant to every organisation as it allowed effectiveness and efficiency in the organisation (Taylor, 1947). In the 21st century, some theorists like Lim, Griffiths and Sambrooks (2010) are proposing that organisational structure development is important and dependent on the expression of the strategies and behaviour of the management and the workers and this has seen the introduction of newer forms of structures as they are outlined in the paper. Bureaucratic structures Earlier approaches of organisational structures better known as bureaucratic structures were based on traditional domination and the belief that an organisation should be configured in such a way that all groups and individuals reported to one authority. This authority connected the whole organisation into one firm working towards a common goal. This traditional view of organisation is traced from way back to a thousand years (Picot, Vigand & Reichwald, 2008, p. 2). Traditionally, organisation was an effort planned as an organisation-wide activity. It was managed from the top where managers were responsible for decision making without seeking indulgence from the subordinate workers. The traditional structure lacked standardisation of tasks. These forms of organisation are being used in the small firms to solve simple problems. They are characterised by being centralised and are based on one-on-one conversation. They are practical in new business ventures as they allow the owner to control growth and development. Development of organisational structures Organisational structures developed from the ancient times in tribal organizations. However, there has been systematic development in the organisational structure especially since the nineteenth century as this period saw the emergence of big organisations, resulting to huge and more complex organisational and managerial problems. Earlier approaches to organisation tended to concentrate more on the limited aspects of organisation. They studied the organisation as a different entity from its environment. They concentrated on the internal organisation and neglected the external environment (Picot, Vigand & Reichwald, 2008, p. 4). Multi-layer corporate hierarchies that primarily function by means of order and obedience are increasingly being replaced by more decentralised, modular structures characterised by autonomy, cooperation between workers and indirect leadership whereby workers are given an opportunity to work under minimal supervision. Post bureaucratic structures These structures were referred to as post-bureaucratic structures that are better suited to solve the bigger organisational problems. These changes have been brought about by the technology advancement and the stiff competition that firms are experiencing. Burns and Stalker (1961) are among the theorists that were involved in restructuring the pre-bureaucratic structures into improved ones. They examined Scottish electronic firms and found out that the bureaucratic structures were not able to cope with advancements in technology and other changes that were rapidly taking place. The environment is today being considered by most organisations as managers scan and monitor the environment where their businesses are located. Managers’ decisions must fit within the surrounding environments. The environment of an organisation is divided into internal forces and external forces and these forces determine the conditions of every organisation. An organisation in the modern view can be distinguished from its environment. The organisation structure in the modern business world is problem specific. It tries to identify the problem and finds a solution for it. Management is embracing division of labour and specialisation is increasingly being adopted. Managements are also making changes in their organisational structures to fit modern times and all employees are expected to adapt to these changes. Organisational structure is a formal decision making framework adopted by top management. It is by the organisational structure that a firm adopts that tasks are divided, grouped and coordinated (Miller, 2007, p. 1). The organisation structure is a tool used by managers to create an environment that will ensure human performance in order to achieve organisational objectives. Organisational structure is one of the key targets in organisations in efforts to increase effectiveness. Many organisations have been noticed to change their structures in radical ways. The changes being made have great impact on the organisation, for example companies are changing the way they handle the employees and there are changes also in the way the firms are being administered. An example is in the US where private supplies companies are merging or joining smaller companies and in the process they change their organisational structure completely (Miller, 2007, p. 2). Organisational structure Organisational structure consists of activities such as task allocation to employees of a firm. It also outlines how the activities are to be coordinated and how the employees are to be supervised. The organisation structure of a firm should show the span of control as this depicts how management and supervision activities are carried out in the firm. The structure allows the expressed allocation of duties in the different branches, departments and workgroups of the organisation. Different organisations have their own structures but all of them have similar characteristics that allow them to be categorised in the following ways as outlined by Ghuman (2010, p. 244). Forms of organisational structure Functional structure: This was common in the traditional organisations and was based on specialisation, thus leading to efficiency. It is economical but can lead to loss of direction. This is because each department focuses on its goals and in the process, the firm can forget its overall goals. Mechanistic structure: This was formulated by Tom Burns and G.M Stalker as they were studying an electronics firm in the UK. It is a traditional framework adopted by various large sized organisations. It is a rigid design that involves a well defined hierarchical structure. This kind of structure requires a strong form of control as it relies on a formal chain of command. It is common in bureaucratic organisations. Firms that have adopted this structure have a narrow span and a pyramidal structure. Organic structure: This structure is flexible and easy to apply to an organisation. It requires a participative management team and it is usually relatively open to different environments. This is because it is more flexible and accommodates changes occurring to the organisation. Flexibility allows organisations that have adopted it to capitalise on new opportunities. The organic structure is common in firms with a flat structure, that is, those that do not have many levels of management. It allows the management to respond to the customers’ needs fast. Most of the companies that have adopted this structure have succeeded as they manage to remove hierarchical barriers. An example is the Nucor Corp which has a streamlined organic organisational structure with only four levels to allow the employees be innovative and facilitate quick decision making (Zeiss & Zeiss, 2005, p. 44). Nucor Corp is a steel manufacturing company based in the USA and has only four management levels i.e. chairman, general manager, departmental managers and supervisors. This structure saves a lot of time and the firm’s financial resource. Most international firms are shifting to this structure. The structure however requires more discretion and responsibility to be given to each employee Divisional organisation: This involves the whole organisation being divided into groups/divisions operating differently and independently. The divisions are self contained and autonomous. In some cases, the divisions are totally independent in their function and activities but all the divisions work under a common umbrella. They have a headquarter office that regulates them. An example is General Motors, which has divisions like the Chevrolet and Cadillac (Ghuman, 2010, p. 246). Divisional structure allows every department to accomplish its objectives but it has a high likelihood of duplication of similar activities by the many divisions, thus resulting to high production costs. Matrix design: This design/structure utilises both the functional and the divisional chains of control. It tries to assign specialists from different departments to work together on a project. It is common in organisations that are on the cutting edge of knowledge or those that are facing stiff competition. It is useful in firms that are having a common problem across all departments. Virtual structure: This form of organisation structure comprises of a group of independent people or organisations that are aimed at solving a specific problem and after solving it, they disperse. It depends on telecommuting, technology and forming relationships with customers, suppliers and others. It is also flexible and thus allows the organisation to adapt to the changing environment easily. The virtual structure allows an organisation to dissolve horizontal barriers and enables flexibility, making it less taxing on the management of time. An example of a firm that has adopted this structure is DELL. DELL assembles components of computers that are ordered from different trusted vendors. However, this structure has some demerits as the company has little ownership and limited sense of belonging among the other members. Post bureaucratic structures have enhanced productivity as the employees can be motivated. They have eliminated the problem of recruitment in organisations as employees are now responsible. The employees answer to an authority that is always close to them and thus solely responsible of seeing the employees perform, as compared to the situation in the past, when they were answering to one person. Post bureaucratic structures have also led to a situation whereby an organisation can respond to changes that occur in its environment and also have reduced the overhead costs by cutting down the number of managers needed to run an organisation (Ravasi & Schultz, 2006, p. 433). Organisational culture An organisational structure is a framework of how a firm is set up. It outlines the span of control and gives a visual picture of the organisation. Each structure has its own chain of command and the chain of command shows how the authority is organised. Organisational structure has facilitated the need for organisational culture. Organisational culture is a set of norms, values and visions that govern the collective behaviour of people who are part of an organisation (Ravasi & Schultz, 2006, p. 433). It is through the organisational structure that a culture is adopted. Organisational culture and structure are closely interrelated and thus, there is need for both of them to be compatible. According to Handy (1976), organisational culture is categorised into the following groups and each has an associated structure Forms of organisational culture Power culture: This type is dependent on a central power source. Adopted mainly by small companies. However, as these companies expand, they drop this culture and adopt other cultures. Role culture: The role culture outlines the roles of every employee in an organisation and gives power to employees as they go down the ladder with the top person having the most powers. This culture is common in large organisations but it has its demerits. It is not the best when there are changes in the organisation environment. It is favoured by managers who like security. Task culture: This culture is dominant in organisations with the matrix structure. It emphasises on getting the job done. Usually, the organisation is divided into groups with members who are unified by the power of the group. The task culture is highly flexible, hence allowing the organisation to adapt to changes in its environment. It is appropriate in firms experiencing stiff competition. Person culture: This culture is mostly found in organisations that are only interested in serving people that are within it. A culture can also be constructive whereby employees are encouraged to work together as teams. Constructive culture allows a firm to complete a task fast and efficiently. This culture enables a firm to pursue a standard of excellence by exploring alternatives before acting (Schein, 1982, p. 54). An organisation that has adopted the constructive culture encourages its employees to work to their full potential in order to ensure satisfaction. Constructive norms are evident in a firm that has adopted this culture. Importance of organisational cultures Organisational cultures have wide range effects to the organisation and every organisation has a culture that is appropriate for its success. The employees have their own cultures which should not be conflict with culture of the firm to ensure its development. A culture and structure of an organisation can be determined by the goals and objectives that it has set. An organisation culture describes the activities that are highly regarded in the company. Conclusion In summary, organisational structures have evolved over the years and modern larger firm are using the new post bureaucratic structures. Organisational structure is totally different from the organisational culture as mostly, the latter originates from the former. Structural features of an organisation are created and maintained. The organisational structure sets responsibilities, rewards, punishments and rights of employees and their behaviours. Organisational structure is adopted officially by decisions on the basis of rules and procedures. The structure determines how the organisation is supposed to operate (Khevra, 2007, p. 2-3). On the other hand, cultural aspects are generally thought of and are constantly changing. Organisation culture spells out what an employee will do or is supposed to do and also reflects the lessons that a firm has learned over the years it has been operational to avoid repeating its mistakes. The structure establishes the positions of the employees in an organisation, for instance the CEO, the secretary and so forth, while the culture defines the roles of every employee. References Burns, T & Stalker, G M 1961, The Management of Innovation, Tavistock, London. Ghuman, K 2010, Management: Concepts, Practice & Cases, Tata McGraw Hill Educator, New Delhi. Handy, B 1976, Understanding Organizations, Oxford University Press, Oxford. Khevra, S 2007, ‘Organizational Structure & Culture’, Training Guide No. 7, viewed 26 April 2012,  Lim, M, Griffiths, M & Sambrook, S 2010, Organizational structure for the twenty-first century, The Institute for Operations Research and The Management Sciences, Austin. Miller, A 2007, How to Manage Human Resource in Organizations, Xulon Press, Virginia. Picot, A, Vigand, R & Reichwald, R 2008, Information, Organization and Management, Springer, New York. Ravasi, D & Schultz, M 2006, ‘Responding to organizational identity threats: exploring the role of organizational culture, Academy of Management Journal, Vol. 49, No. 3, pp. 433-458. Schein, E 1982, ‘Corporate Culture: Constraint or Opportunity Strategy?’ PA International Consulting Services. Vol. 1, No. 1, p. 54. Taylor, F W 1947, Scientific Management, Harper & Row, New York. Zeiss, T & Zeiss, A 2005, Get 'em While They're Hot!: How to Attract, Develop, and Retain Peak Performers in the Coming Labour Shortage, Thomas Nelson Inc, New Jersey. Read More