Category: Organizational Structure

The functional structure of an organization is developed in such a way that every section of it is grouped on the basis of functions and tasks that it performs. For instance, an organization can have a marketing section, a sales section, a customer support section, and so on. Such a structure works efficiently for smaller businesses in which every department relies on skills and knowledge of specialists in different fields (Writing, 2018).

The divisional structure of an organization is set up with the help of separate divisions, which are small organizations with a low autonomy level. Thus, the entire company is composed of divisions responsible for different processes and services. Such a structure is best suited to large organizations that need various objectives to be met in specific and rapid ways (Writing, 2018). The matrix organizational structure has qualities of both divisional and functional approaches. Usually, it is implemented in large multinational corporations to allow for the necessary distribution of tasks and processes between departments and divisions.

Virtual organizations are characterized by establishing links between the main company and outside parties such as clients, partners, vendors, and so on. Such links are supported through computerized solutions for achieving simultaneous profitability and growth. The team structure of organizations is developed so that employees work together on certain projects; thus, the structure ensures a pragmatic division or grouping of workers on the basis of objectives that they have to reach (Greechie, 2017). Team-based organizations are cross-functional and interdepartmental, which means that they include workers with different skills as well as ensure that these skills are versatile and can be used in a variety of projects.

Downsizing can have both positive and adverse effects on employees and organizational structures. For workers, there is a risk of suffering financial and psychological issues. For instance, departing employees may compare themselves to workers who remain in their positions, which contributes to lower self-esteem. They can also get angry with the management for deciding on their dismissal. Also, since employees are used to receiving regular income, their lifestyle may change drastically because they stop receiving it.

For organizational structures, downsizing can be an issue since departments that heavily rely on teamwork may suffer from the lack of talent, which is especially true for team-based and functional structures. Also, if large downsizing is involved, the structure of an organization may change completely because there will be fewer workers in departments or divisions.

Behavioral implications depend on the structure, the mechanics, the level of fairness, and formal policies that exist within organizations. Some workers may complete their assignments when the structures are heavily regulated and standardized, which is especially true for employees of highly specialized jobs. Such employees may feel secure and accomplished when their managers tell them what to do specifically.

On the other hand, workers whose everyday tasks rely on creativity may not work productively in heavily structured environments where each department has specific objectives and requirements. This type of workers performs better when there is less pressure from their managers. Also, there have been studies to show a correlation between centralization and job satisfaction, with autonomy being a preferred structure (Sadeghi, Amani, & Mahmoudi, 2013). Overall, behaviors of employees are directly linked to the type of organizational structure in which they operate due to the differences in their preferences to governance.

References

Greechie, S. (2017). Organizational team structure. Web.

Sadeghi, K., Amani, J., & Mahmoudi, H. (2013). A structural model of the impact of organizational culture on job satisfaction among secondary school teachers. The Asia-Pacific Education Researcher, 22(4), 687-700.

Writing, A. (2018). Different types of organizational structure. Houston Chronicle. Web.

According to Agarwal (1983), formalization is the degree to which regulations, rules and processes are observed within an organization.

The fundamentals of formalizations diverge greatly from one organization to another in that some organizations have strict reporting and departure time to and from work with time clocks applied to monitor unexpected attitudes, another organization demands that workers spend enough time to get the duties accomplished while another may demand that workers have the right to exercise their own judgment in carrying out duties.

Formalization therefore is the application of rules within an organization and the extent of their codification (p. 354).

Advantages of Formalization

One of the key advantages of formalization is the fact that formal organization have easy to fathom leadership structures that are placed in concert by the given rules and regulations thereby eliminating the question of who is in control of the organization. The formal organizational structure leaves no chance for misconception of the modus operandi and processes.

Formalization also improves rationality of organizations that applies it as it seeks to standardize attitudes by enabling precise predictability. A good example is the standardization of production processes for the production unit workers in an organization with the aim of ensuring quality before products are released into the market.

Another major advantage of formalization is the fact that it enables a smooth transition of authority by enabling habitual and customary succession processes with little or no interruptions to the firm’s functioning. An example of such processes is the systematic appointment of the Catholic Church’s cardinals and popes.

The other significant benefit of the formalization is the fact that they offer fundamental framework of the division of labor and responsibilities. Lack of such structures makes employees to concur on roles and responsibilities. It therefore creates clarity on the level of assistance and input that every worker can anticipate from another and what is anticipated of him in return (Gupta, 2009).

The system also promotes discipline amongst the staff in the organization as it aims at controlling the attitudes of the worker and improving on the efficiency of the organization.

Other benefits of formalization include the fact that it enables easy and fast assessment and revision of the organization as a result of the changing requirements and dynamic operating environment. It also offers a framework for the structuring of pay scales and in the human resource development practices such as recruitment, elevation and workforce planning (M.Walker, Boyne, & Brewer, 2010).

Disadvantages of Formalization

Although formalization has numerous benefits, some of the disadvantages include the fact that the coded decision making process is long thereby hampering faster decision making and making the organization inefficient in meeting its obligations. Decisions are made by the leaders who cannot be influenced by the workers who are directly affected by the decisions.

The result of this is that solutions are decided by individuals with no direct knowledge or understanding of the problems. Formalization also discourages and hampers innovation and creativity by workers as a consequence of rules and regulations that demands of workers to follow laid down procedures and regulations in the performance of duties.

The system creates a state of subordination within the organization through controls that requires employees to follow strict instructions and as a result few individuals in such organizations are able to think beyond the rules, be innovative and take initiative (M.Walker, Boyne, & Brewer, 2010).

References

Agarwal, R. (1983). Organization and Management. Nodia, UP, India.: Tata McGraw- Hill Education.

Gupta. (2009). Principles of Management. Mumbai, India: PHI Learning Pvt. Ltd.

Walker, R. M., Boyne, G. A., & Brewer, G. A. (2010). Public Management and Performance: Research Directions. Cambridge, England: Cambridge University Press.