An organizational structure defines the planning and accomplishment of activities in an organization to ensure achievement of goals and objectives. The activities in a structure include allocation of tasks, coordination of human resource as they accomplish their duties, supervision of employees among other activities. Different organizations have different structures depending on the line of business and the interdependency of the departments involved. Conventional organizational structures include Functional, Divisional and matrix structures. Each of the structures is dependent on the level of application of systems theory in the organizations. Scientists developed the systems theory in a bid to explain natural and biological sciences such as the working of the human body. However, the approach applies to organizations. The systems theory explains that organizations comprise separate and organized entities known as systems. The bodies are related and interdependent forming the central unit known as the organization.
Functional organizational structure involves division of tasks into groups of employees. The groups are responsible for accomplishing the tasks and reporting to their supervisor (O'Neill et al., 2016). In formal employment, functional structures are common where a person is hired in a specific department with a specific job description as defined by the employment contract. For instance, one may be hired into the marketing department, another in the production department, others in the oversight and quality control department. Each of the departments above has a manager who supervises the employees and answers to a person higher in the management pyramid. For example, the human resources manager oversees employees in a company. The HR manager, in turn, answers to the company's vice president who may be in charge of several departments. In the functional organizational structure, employees are segregated based on their skills. This ensures that task allocation is based on merit and only the most qualified are assigned to a task in a specific department.
The functional organizational structure introduces the concept of departments. The departments such as marketing, production, human resource are systems partisan in an organization. The systems are related with one another, and the accomplishment of the aims of each one is dependent on the relationship (Thompson, 2017). The functional organizational structure has the significant challenge of inefficient communication between departments. In most cases, managers conduct the communication between departments and the employees have little or no interdepartmental communication. For instance, employees in the production line of a vehicle manufacturing industry may lose motivation when they lack communication with the marketing department to understand demand and trends in the market. Therefore, a functional structure alienates the systems in the organization.
The divisional organizational structure is suitable for large organizations. The structure cuts across various divisions in the company allowing more autonomy (Ashkenas et al., 2015). For instance, in a company like Samsung, there are different divisions such as innovation, environmental sustainability, current trends in the digital market, provision for improvement among others. The divisions are part of the large organization, but they operate individually to ensure the efficient transition of activities and achievement of departmental objectives. For instance, the department on environmental sustainability conducts tests on the materials used in making Samsung products and how the materials react in the environment when the products are disposed of. The division on digital trends investigates the market needs and positions of technology and determines what needs to be included in the gadgets produced. The division on provision for improvement provides for aspects such as debugging and installation of updates once the products are in the market. Each of the above departments operates individually and has an individual budget allocation. However, the divisions form part of the extensive system of the company are only treated as separate entities to enhance their efficiency.
The divisions in the divisional structure could be created based on geographic locations. This applies to companies that operate on a global scale. They can create divisions in Africa, Asia, Europe, America, and so on. The divisions would be similar to their mother organization with the different operational scale. The divisional structure allows efficient running of large companies by minimizing the number of people that report to the chief executive officer (Ashkenas et al., 2015). The leaders of each division are responsible for the entire department in that division, and they answer directly to the CEO. The top management thus has the divisional leaders accountable for the operations of the specific departments. The divisional organizational structure treats divisions as systems and may cause some challenges to an organization. For instance, each division has its budget and accounting department. There is always a challenge in reconciliation the accounts from all divisions into one report.
A key advantage of the divisional organizational structure is its excellent ability to measure performance (Thompson, 2017). Since the organization is divided into divisions, it is easy to identify the best and worst performing divisions. The management can, in turn, take corrective action to remedy the underperforming department. Due to the delegation of managerial duties, the divisional structure causes positive internal competition. The managers of divisions work hard to ensure that their divisions lead the others in amassing of profits and adherence to industry standards. The divisional structure allows organizations to be flexible and respond to changes. The business world is dynamic and laden with uncertainty. The success of an organization depends on how well the management responds to changes in the variables of business and predicts changes in the future. Due to the division of work, divisional structure organizations manage change better as the top management identifies and empowers the departments worst hit by the change ensuring that no detrimental effect develops. The systems theory dictates that the interactions between the divisions must lead to productive processes (Chikere & Nwoka, 2015). A single division cannot survive on its own. An organization needs all its divisions to meet its objectives.
A matrix organizational structure groups the workforce based on their functions and the products to be made. It mostly employs teamwork to account for personal differences in the employee workforce (O'Neill et al., 2016). For instance, in a company that produces two products, the employees would be divided based on their abilities in producing either of the products. Teamwork allows the exchange of knowledge between persons and eliminates corporate boundaries between various levels of management. When employees work as a team, they understand one another and develop motivation while working towards a common goal. The strong employees mentor the weak ones leading to gradual improvement of output. In a strong organization matrix, the functional managers report to a project manager. The functional managers lead their specific departments and offer expert guidance to employees as well as assign resources to the departments. A matrix structure allows specialization in line with the systems theory in that; the process of finding the most qualified employee for a specific function enhances the hitherto pool of knowledge regarding a particular task in a system.
The matrix organizational structure divides tasks into projects. Project managers who further increase the complexity of the chain of command lead the projects. Employees may find it hard to differentiate between project managers and functional managers. The matrix structure is control oriented, and employees may develop alliances and different loyalties towards managers. The increased number of managers enhance the accomplishment of tasks but add on the management costs incurred. However, the matrix organizational structure diminishes the vertical structure of management where communications come from top managers to employees. The matrix structure creates a more horizontal perspective that eliminates bureaucracy and allows mutual communication between employees and managers at all levels (Ashkenas et al., 2015). The result is better interactions of systems in the organization and timely accomplishment of team activities and company objectives.
The type of organization and activities define the organizational structure to apply. For companies that have departments with properly laid out functions, a functional structure may be convenient since it will state what each employee should do at the specific time. Large organizations are better suited with a divisional structure because it diversifies the management and enhances control. A matrix organizational structure enhances teamwork and facilitates the spread of knowledge across boundaries. All organizations comprise systems that are interrelated and depend on each other to successfully meet their mandates and work towards the achievement of organizational goals and objectives.
Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. (2015). The boundaryless organization: Breaking the chains of organizational structure. John Wiley & Sons.
Chikere, C. C., & Nwoka, J. (2015). The systems theory of management in modern day organizations-A study of Aldgate congress resort limited Port Harcourt. International Journal of Scientific and Research Publications, 5(9), 1-7.
O'Neill, J. W., Beauvais, L. L., & Scholl, R. W. (2016). The use of organizational culture and structure to guide strategic behavior: An information processing perspective. Journal of Behavioral and Applied Management, 2(2), 816.
Thompson, J. D. (2017). Organizations in action: Social science bases of administrative theory. Routledge.
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