Organisations and Behavior

The organisational structure used in a company is intended to form relationships, motivate, increase productivity, co ordinate and provide direction between employees. According to the business dictionary (2013), an organisational structure is the hierarchical arrangement of lines of authority, communications, rights, and duties of an organisation. It determines how roles, power and responsibilities are assigned, controlled and coordinated and how information flows between different levels of management. A structure depends on the organisation’s objectives and strategy. There are many influences on an organisation’s structure, some of which are: its size, task, staff, age, its culture and management style and its legal, commercial, technological and social environment. The most common organisational structures which managers consider are the contemporary structure and the traditional structure. The contemporary structure allows for the movement of information to all parts of the organisation, this enables the organisation to respond to rapidly changing markets at a faster pace than the traditional structure. The contemporary structure takes into consideration the employees needs.

According to business case studies Elton Mayo’s theory illustrates that if the company or managers took an interest in employees and cared for them, it had a positive effect on their motivation. The employees felt more valued and empowered. His work also showed that employees often work best in teams. It is the more flexible structure compared to the traditional design. According to the BPP learning media (2010) some attributes of the contemporary organisation structure includes: the flat structure which has a small number of hierarchical levels which implies a wide span of control. The chunked or ‘unglued’ structure which means team working and decentralisation, or empowerment, creating smaller and more flexible units within the overall structure. The jobless structure where employees are able to be in every aspect of the organisation and do not have one particular job hence ‘jobless’ structure. The output focused structure which focuses on the results and on the customer instead of internal processes and functions for their own sake.

A weakness associated with the contemporary structure is that there may be conflicts arising due to uncertainty of roles or role conflict between managers. Some organisations use these contemporary structures: the matrix, multifunctional, multidivisional, and network. For the purpose of this assignment I will only be going into depth with one of these structures, the multidivisional structure. The multidivisional structure, according to the BPP learning media, is where each product, market or business unit is placed in its own self- contained unit that operate as their own separate entity. An example of this, taken from transtutors.com, is Procter and Gamble who owns multiple national brand names and creates self contained business model and organisational structure for each product, each brand is given its own cooperate identity, leadership and organizational design.

This structure is a decentralised structure and thus allows for flexibility and quick response to environmental changes. There is also a clear identity and purpose in this structure which increases team member loyalty, dedication and satisfaction. As all organisational structures would have, there are advantages and disadvantages to this type of structure. Some advantages to the multidivisional structure are: it enhances innovation and differentiation strategies, promotes motivation among team members, in the BPP learning media, some more advantages are that it betters financial and strategic control, growth is made easier and stronger pursuit of internal efficiency. Disadvantages to this structure: conflict between departments is common, it may be costly because each division is considered its own entity, lack of communication between departments and it may result in duplication of resources, as said in a management blog. The culture best associated with this structure would be described as the role culture also known as Apollo. According to the BPP learning media (2010) role culture refers to the classical, rational organisation bureaucracy. [pic]

Figure 1.1 Diagram showing the multidivisional structure. The traditional organisation structure, conforming to what is said on Buzzle.com, is those types’ organisational structures that are based on the functional divisions and departments. These kinds of structures follow the organisation’s rules and procedures; they are characterized by having precise authority lines for all levels of management. This is a centralised degree of authority. Whereas the contemporary structure has a wide span of control the traditional structure can be referred to as a tall organisation with a large number of management hierarchies which leads to a narrow span of control. There is a strict specialization of jobs unlike in the contemporary design where there is a ‘jobless’ structure. ** The scalar chain of command can be used to describe the traditional structure because it is a hierarchy from the highest to lowest rank, communication runs vertically top down or bottom up, this can become very inefficient as decisions that need to be made quickly will have to wait until the information reaches the top level before actions can be taken by those who need permission to act.

Where as the contemporary structure has a horizontal flow of information which enables the employees to make decisions on their own therefore decision making is faster, and they are likely to respond faster to demands being made by both internal and external factors, motivation and satisfaction levels of employees are likely to high as well with that level of ‘freedom’. Though according to the BPP learning media the quality of decisions made in the traditional design is (theoretically) better due to the senior managers’ skills and experience. *According to theorist Max Weber, bureaucracy is the most efficient form of an organisation. The organisation has a well defined line of authority and it has clear rules and regulations that are strictly followed, this is well related to the traditional structure as it is a more formal type structure and the levels of hierarchy are the same.

In the traditional organisational structure there are different departmentations some of which are- by geography, by function, by product or brand. Again, we are only going to explore one of these departmentations, the functional organisation. It states that in the BPP learning media (2010) the functional organisation involves the grouping together of people who perform similar tasks or use similar technology or materials. Some advantages of the functional organisation are: good performance by employees because they are grouped together according to their knowledge and skill. It avoids duplication, it makes recruiting of professional specialists easier. Disadvantages to this type of structure are highly skilled employees can be costly to the organization, Employees may have little understanding or concern for anything happening outside their functional area, this may cause obstacles in communication, coordination and cooperation. The culture of the traditional organisation would best be described as the power culture also known as Zeus. This culture typically means that the organisation is controlled by those highest in power which most often means the owners or founders of the organisation.