Organizational Structure: Benefits and Challenges - Research Paper

Introduction

Organizational structure is how activities in a firm are conducted. These tasks might include the supervision of employees and the allocation of responsibilities. The organizational structure is there to direct these activities towards the goals of the organizations. An ineffective organizational structure will result in the organization facing challenges like the inability to realize profit and loss of employee productivity. If this is the case, then there is a need to restructure the goals of the organization, and this process is known as organizational restructuring. To perform a proper organizational restructuring, there are some elements that the managers of the said organizational have to follow. These elements guide the managers on the areas that need changes and those that do not.

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Elements of Organizational Restructuring

The first element that the managers will look at when conducting an organizational restructure is departmentalization. Departmentalization is the process of an organization grouping different individuals that do the same thing together. For example, people that are concerned with finances and accounting are in the finance department. When conducting a restructuring of an organization, managers have to consider that departments are important if the organization is to perform optimally. The managers have to restructure the organization in such a way that these departments will still be able to perform at their peak and not be affected by the changes. In the restructuring process, the managers might opt to consolidate departments that will produce better results when grouped (Arham et al., 2018). For example, grouping the finance and sales department in a restructuring process might be the way to go as the two perform almost identical functions in an organization. To effectively analyze the nature of the departmentalization of organizations, the managers can interview the needs of the different departments and employees, and what they would want to see in the new changes. This will allow the managers to be able to create changes that cater to the needs of the departments and the employees, and thus achieve the best results (Geschwind, 2019).

Communication channels are also another essential element to consider during organizational restructuring. Effective communication in organizations stem from communications from employees to the management and employees with one another. Effective communication is also vital between departments for the smooth workflow and exchange of information. Communication channels should not be disrupted during these reconstruction channels. Disrupting communication channels, especially between two vital departments, can cause a lot of problems for the organization. For example, during an organizational restructuring, an attempt to improve the working of a department, the communication channels might be changed. This change might result in communications being ambiguous and uncertain. To have changes to the organization without having negative connotations the managers have to conduct an extensive analysis of the channels of communication and how they work. After finding this out, they should then set the restructuring procedure in such a way that it complements and improves the already existing communication structure. As a result, organizations will have an overall better communication structure (Ugboro, 2016). Consultation with employees is vital to ensure that the communication channels are improved. It is also important to note that the communication that the organization should aim to make better is not communication from the management to the employees only, but also communication from the employees to the management. The latter form of communication is vital as it gives the management feedback on what is happening in the company.

Employees are also another important element that the management has to consider when making the changes to the organizational structure that it plans on doing. Employees are the backbone of the success or failure of any organization. The employees are the ones that do all the functions in the company, and as such, they are an important part of the restructuring process that should not be overlooked. Employees in any organization have different goals, demeanors, habits, and beliefs. These differences between the employees will result in a mixed reception of the changes the organization is aiming to make. However, it is important to note that it is human nature to oppose change, and there might be a greater percentage of individual employees that will be opposed to the changes as compared to those that will be enthusiastic for them. The organization's management should realize that for the new changes to take effect and propel the organization to a greater height, the involvement of employees is integral. It is important to note that not all employees will agree with the changes, and as such, the company should ensure that a majority of the employees are on their side. Even after the changes have been made, it is important to keep tabs on the employees and collect their feedback on how the changes are affecting their ability to do work effectively. Taking employee feedback once the organizational restructuring has happened is important as it shows the company the effects that the changes have had. If the effects have been negative, the company can put in place effective changes to mitigate the negative impacts of the changes.

Another element that affects organizational restructuring is the external business environment. The external business environment is the factor that affects the business that is beyond the control of the organization. These factors include competitors, suppliers, government policies, and unions. These factors have a great impact on what the business can and cannot do (Fleming, 2017). Therefore, when conducting an organizational restructuring, the managers of the company must consult on the factors in the external environment that might affect these changes. For example, an organization might want to reduce its costs by limiting the amount it spends on treating its waste. However, this is not possible as there are government policies that make it a criminal offense for companies to discharge untreated waste into the environment. The organizational structure of competitors is another factor that affects the ability of the company to change the organizational structure. Any organization aims to have the upper hand on its competitors, and thus, the company can position its changes to the organizational structure concerning this.

The chain of command in an organization is also another element that the company has to consider when conducting an organizational restructuring. Chain of command is the line of power in an organization that is often drawn from the top level to its lower levels. This chain of command shows who is answerable to whom and what responsibility and individuals have. The chain of command is important as it shows people their role in the company and their level of authority. For example, a senior manager has more authority and responsibility in a company and is thus higher in the chain of command than a regular employee. When conducting an organizational restructuring, it is important to note that these chains of command serve an important role in making the operations in the organization straight forward and with as little ambiguity as possible. It is through the presence of this chain of command that employees know who to approach when they want to report something. Therefore, it is vital that the organizational restructuring maintains the existing organizational chain of commands. However, if there are changes that are made to the structure of the chain of command, it should be clearly stated to the employees so that they know the change in the chain of command (Benos, Kalogeras, Verhees, Sergaki, & Pennings, 2016).

Work specialization is also another element that organizational restructuring has to account for within its mandate. Work specialization is the degree to which a company divides jobs into individual tasks to be handled by separate employees. For example, instead of the production of a product to have one person that makes it all, the production is broken apart between different people that are specialized in different areas of production. Many companies use this concept of division of labor as it provides the best return on investment. Because of the division of labor, many employees are experienced with only one part of the production process (Sarna & Tyagi, 2017). During an organizational restructuring, it is important that the company puts this into consideration and uses the experience that certain employees have got throughout their careers. Without ensuring that the talents and experiences of these employees are put to proper use, the company would be effectively throwing away the talents and experiences that the employees have.

Furthermore, as stated above, many people do not like changes. When an employee is moved from an area that they are already used to, they will often dislike the change, and thus their productivity will go down. This is especially the case with people that do highly specialized jobs.

Conclusion

Organizational restructuring is important in ensuring that the organizational structure that the company uses is still relevant to the current date and that its competitors do not have the upper hand. However, there are several elements that the company has to consider when creating these organizational restructuring programmers. These elements dictate whether the restructuring process will be successful or not. These elements include the chain of command, the employees, and their willingness to change, the factors in the external business environment, work specialization, communication channels, and structures and departmentalization. These different elements are important in the success of organizational restructuring, and if effectively taken into consideration, the restructuring is bound to succeed.

References

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