The Concept of Organizational Structures

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Table of Contents

Introduction
Discussion
Conclusion
References

Introduction

Organizational structures initiated during the old times of hunters and collectors in tribal organizations through high- end royal and clerical power structures to the businesses of different kinds and forms. The concept of an organization’s structure starts at the subordination of various firms that combines together and contributes to serve one general aim. Organizations are segmented entities and the structure of an organization is commonly set up in one of a variety of styles, which sometimes depends on the objectives and total system of the business. This will determine the modes in which it shall run and perform an organization (Castanians and Helfat, 1991).

Also, this tolerates the explicit allocation of duties and responsibilities for various functions and processes to different entities. Usual illustrations of a particular entity of firm can be as follows; branch, department, site, workgroups and individual people as well. The contract between individuals in a structure usually appears under a time constraint and is limited on work contracts, or work orders or maybe under indefinite employment contracts or program orders.

Set up for organizational structures perhaps does not relate with the information based on the facts about the firm and its environment, and the evolution in operational action. The kind of diversity declines the performance most especially during the growth period. An example of this is an incorrect organizational structure which may get in the way of cooperation and hence, obstruct the completion of the orders in a specific period of time as well as the limits of the resources and budgets. An organization’s structure is said to be receptive on the prerequisite requirements of the process involved, has the objectives of optimizing the ratio of effort and input to output (Blackburn, 1982).

An expansion of a business, Indigo as such, affects the chain of command for it will be extended and the duration of control and supervision will be broadened. When the organization comes to an age, the flexibility will descend and the creativity will become exhausted. Thus, an organization should be changed from time to time to be able to recover. A condition may occur if a certain change is hindered by the internal and external factors, the last escape or remedy is to turn down the organization to prompt for a renovation and launch a new set up.

Discussion

When two organizations merge what types of structural issues do you think might need to be addressed?

The combination of two organizations results in the mergence of the various sectors that comprises the departments and employees of the whole structure of the business. As what is said earlier, the expansion of businesses such as merging together two businesses like what happened in Indigo and Chapters portraits an explicit consideration for developing new organizational structure and take risk for the consequences that arise. Factors like the size, technology and other significant issues should be taken account in expounding the scope of a business.

As how organizational structures of Indigo and Chapters differ from each other, an aim to understand the reason why the firms possess such structure. This means the factors like degree and type of horizontal differentiation, vertical, mechanisms of control, formalization and the centralization of power and authority. According to classical theorists such as Taylor, Fayol and Weber, a sole way for the organizations to be structured exists, though the organizations differs acceptably on the attributes of an organizational structure (Reijswoud, 1996). Thus, an approach should be made in understanding the determinants of the variations with regard to the structural formation of the businesses.

On the other hand, most of the theorists today argue with the conventional proposition of the scholars. In today’s world, they believe that there is no best way to organize a business (Leavitt and Whistler, 1958). They focus more on the factors that will suit the structure of an organization such as the size, innovation on technology, as well as the environmental factors that surrounds the business internally and externally. This principle can be referred to as the contingency theory where in it contradicts with the beliefs of the classical theorists mentioned earlier that an organization should be run by a sole and solid organizational structure (Negandhi, 1975).

Adaptation and Environment

An organization’s environment largely affects the structure of the business. They should adapt to its environment in order to respond to the needs of the company and to have a highly organized system. Just like for example, the organizations that face intricate and highly indefinite environments usually distinguished so that each unit of the organization will face a smaller and more specific answer. Taking the case of Indigo and Chapters, the two are somehow different because Chapters relatively operate a large business than Indigo because it is the combined Cole and smith bookstore. The two though had the same organizational structure but still merging two separate firms is a challenging role for the supervisor of an organization.

Indigo, who was the first to launch the first bookstore with the incorporation of music and licensed cafes, is somehow different from the operational activities that Chapters have. Thus, the mergence of the two primarily took account of being a mass production which will more likely be exposed to larger environmental factors.

Environmental factors can largely affect the business most especially when the structure does not comprehend with its environment. The tendency on this issue will affect the performance of the organization and will not make the grade. And mostly, an organization that operates in the first few years that fails to adapt to its environment do not succeed (Leavitt & Whistler, 1958).

The stability of an organization’s environment will determine the process of selecting the best suitable way to adapt to its environment not just because they all altered themselves. But for the reason that those are not properly adapted, organizations will more likely fail.

Aside from technology and environment, economy and institutionalization should be taken consideration as well. Economy plays an important role in a business process. It serves as the arbiter among the transactions that is largely held by mass production firms that includes the buying and selling. Each organization is composed of the inputs that suppliers represent and the outputs that customers on the other hand represent. Every organization depends on suppliers and customers to be able to maximize profit through the proper utilization of resources and money. The company is said to be with a power because they are seeking for an extensive supply less than they need it. Dependence on the part of an organization is a function of the availability of the preference supply.

Would a mechanistic or a more organic structure be appropriate for Indigo? Why?

For Indigo, what best suits is the application of the mechanistic structure. This is because of having a larger firm upon taking over the chain of Chapters (Robbins et al., 2006). Before, an organic structure can still be applied to Indigo because it manages a small store which will be accurately manipulated by a simple formation of organization. It is said earlier that an organic structure just make a certain product in which small number of managers only is required to tend the store yet, profits are still maintained. But merging two organizations depicts a larger responsibility and scopes more functions to be performed.

The hierarchy on mechanistic structure should also be tall and this implies that Heather Reisman should add managers whom will look for the departments that supervises other subordinates, in short, Reisman should organize the staffs according to the mechanistic hierarchy to be able to distribute the responsibilities in properly managing the bookstore and will eventually solve the problems that the bookstore faces. Thus, a proper way of organizing the business is a major factor of being successful in the market. Indigo and Chapters should adapt to the structure of one another and possess a combined organizational structure with a larger scope of responsibilities hence Reisman should utilize the mechanistic structure.

The effectiveness of an organization’s structure manipulates the industrial relations between the internal environment of business firms as well as the relationship among different entities that the organization has and improves the working relationship among single business units. Organization should maintain the order of the set allotted by the firm and control to be able to watch the processes. An organization should support the command for coping with multiple orders and an alteration of the conditions affixed during the performance of work. An organization should tolerate the application of each individual’s potential when it comes to the skills and talents they have in order to develop flexibility and apply creativity.

The frequency and type of limitations that arise during a production can greatly affect the type of structure that an organization has. These two types of limitations are said to be; one can be orderly resolved and requires an analytic way of search process just like fixing a machine mechanically and the other goes with the absent of an analytic framework that basically relies on the intuition and guesswork such as making a film, synthesis research and advertising.

What role do you think organisational structure plays in an organisation’s efficiency and effectiveness? Explain.

A structure is said to be an entity which comprised of elements such as the people, market trends, and departmental mandates and so on. This has a relative affect on each other as they are formed and definitely determines the behaviors that an organization acts with its environment (Fritz, 1996). Also, Fritz said that an organizational structure is designed in a premeditated manner. Small firms that transformed into a bigger one and the single business units will now emphasize the managerial power (Fritz, 1996) should be performed excellently like the mergence of Indigo and Chapters.

The role of organizational structure in the effectiveness of an organization primarily gives a picture of having a good industrial relationship which will result to a more efficient output. Organizations are not structured just because of being advanced. Being advanced is not a positive way of swinging from left to right or altering the acts just to serve as the foundation for future developments.

Basically, in an organizational structure, a resolution is a must if a certain problem aroused and not just switches to other alternative. Hence, an organization contributes to avoid the tendency of mismanagement on a certain business. An effective organization is a picture of having a coordinated individuals inside the firm acting together for a common goal and be receptive for a massive achievement (Fritz, 1996). This is a matter of being prompt in all organizational activities which will determine having the result of an affirmative business structure. An organizational structure that fits the business should then be maintained in order to establish a stable workforce along with the significant factors (Barnard, 1938).

Sometimes, imitation comes to the businesses when a relative organization possesses a successful system, other firms will more likely to copy the structure that it has for the perception that they too will come out with a profitable business. This one can cause the whole industry to take on the same kind of structural features of an organization. This happens because of the fear of being blamed or litigated (Leavitt & Whistler, 1958).

If many companies become successful and maximize profit for the reason of using a certain organizational structure and as an organization’s leader, you argued to adopt the same structure which resulted to the failure of your organization; it will be largely blamed on the leader because of being not innovative and adaptive. Thus, this comprises the way organizations escape from being litigated. In addition to, dispersal of ideas because of the transfer of personnel and professional training can contribute to lessen diversity as well as result to uniformity.

How might technology affect Indigo’s organisational design?

Technology is a major issue that most companies or businesses encounter. The recognition for the output that machines give to the firms is huge. In Indigo’s case, considering that they have product lines which are attributable with the technology, this should be firmly held.

Technology takes almost half of the organizational design that Indigo has and Chapters on line as well. The use of technology can be regard as one that manipulates some parts of the business and empirically, personnel should be minimize because using a technology in a wide manner depicts that employees only accounts for the manipulation of the machines. Therefore, Indigo should equally manage the staffing and complement with the use of technology in the organizational structure (Finkelstein and Hambeick, 1996).

Technology

Primarily, size does matter in an organizational structure and the technology as well. Size this refers to the total capacity, number of employees, number of customers that can either be profitable or not, and the main entity. According to the studies conducted by Blau, there came a differentiation on the number of levels, departments and job positions that increase with the size, but also with a decreasing rate.

However, the percentage of an organization that comprised the administrative overhead declined with the size and leading the economies of scale. The ascending size can also be relative to the progress of structuring the activities within an organization but the shrinkage centers on the power and authority. Practices of managers like the flexibility in staffing, the extensive delegation of authority and focus on the outcome instead of the procedures are connected to the size of the unit that a firm manages.

Another factor to consider in the structural issues is the Technology of an organization. Taking for example a business in a bank, like processing a check. This kind of activity is enacted by the business firms that are highly formalized and has a large deal of forte on a specific subject and diversification of labor. It also includes the high centralization of making decisions. An argument to that appears on the creative section of an ad agency and normally not official at all. Sometimes the division of labor comes in to a vague one and is decentralized (Roberts, 2004).

The technological aspect of a business usually goes with a specific activity of a specific structure that businesses have. By familiarizing the primary production system of an organization can visualize the whole organizational structure. In a unit production or a small batch of an organization, the companies that make a certain product and produce only a small quantity just like for example the tailors, mechanical equipments, and other limited produces: this sort of companies should require a highly industrialized innovation when it comes to the knowledge of the employees in using new machineries.

The total cost can be attributed as an expensive one because of the reasons that the work process is not certain and it is hard to plan or make a routine (Smith et al., 1994). Unit productions are also distinguished to have a flat organization and appear to have a small number of levels of hierarchy. The leaders on a single business unit usually do not control the firm on a long period of time, possesses a small number of managers and relatively portrays an organic structure.

Normally, the other face of a firm goes along with a big number of productions and is relatively bigger than of a small batch. They also possess taller hierarchies and the bottom level even the supervisors manages to have a control over the firm for a long period of time. Not like the small batches, large productions have more number of managers due to a tall hierarchy and possess a mechanistic or bureaucratic type of structure. Somehow, large productions are cheap to operate.

In a continuous production, basically these are companies which process liquids and powders like the bakeries, electric power implants and the like. The machines used do almost all the things for the firm and the labor force of the employees just resembles as the monitors and manipulates the machines and sees if any alteration of the plan occurs.

This kind of organization has a tall but thin and sometimes inverted pyramid and prevails that almost there is none at the bottom. An organic structure of a business is more likely at the top of this kind of production. The paradigm of a continuous production depicts a mechanistic structure at low levels but for the reason that machines are the key players of the operation, the supervision and management appears to be at a lower level and paper works do not arise frequently.

Thus, a continuous production is a combination of a unit and mass production which puts together an organic and mechanistic type of structure. However, the operations are largely affected by the rise and use of technologies in completing their tasks.

Conclusion

Upon the illustration of the organizations, some tend to be very much centralized and formalized and specifically they are recognized as bureaucracies. In a bureaucratic firm, the best probable way of an organization to form is when the task is profoundly understood and how the firm is able to execute the following task in a more advanced certainty, while other organizations appear to be unorganized and possesses a lot of limitations and are not properly carried by bureaucracies. Many limitations and situations that have a formal set of ways that defines the manipulation of each situation are somehow not related with the questions that usually arise.

The organizations hence are decentralized and out of focus when it comes to the use of coordination and control. And thus the reasons prevailed to be because of the human bounded rationality which typically refers to the fact that since human beings have a limited knowledge and is not always capable of having a definite optimal resolution to the dilemmas that arise in an organization. With that in mind, people only have the time and capability to take into account small number of possible resolutions and opt to choose the best alternative though all can not be considered (Biggadike, 1979). For a fact, multifaceted systems are very hard to plan ahead because there are many contingencies that need to be addressed.

It is vital for every organization to accurately choose the structure that will fit the nature of the business. It comprises the considerations of the hierarchal matters which will further help develop a more organized business.

Indigo and Chapters indeed both performed a good management style but in the latter years, failure to maintain the strategy on the organizational structures came. The acquisition of Chapters by Indigo describes the expansion of a single entity and means to have a new structure which will be applicable for a larger firm. Though both share the same nature of product line, managing a small production from a bigger one is largely different. Consequently, a change for a more organizational structure should be adapted by Heather Reisman.

References

Barnard, C. I. 1938. The Functions of the Executive. Harvard University Press, Cambridge, MA.

Biggadike, R. E. 1979. Corporate Diversification: Entry, Strategy, and Performance. Harvard University Press, Cambridge, MA.

Blackburn, R.S. (1982). Dimensions of structure: A review and reappraisal, The Academy of Management Review 7 (1) (1982), pp. 59–66.

Castanians, R. P., & Helfat, C. E. (1991). Managerial Resources and rents. J. Management 17 155-171.

Finkelstein, S., & Hambeick, D. C. 1996. Strategic Leadership: Top Executives and their effects on organisations. West Publishing Company, St. Paul, MN.

Fritz, R. (1996) Corporate Tides: The Inescapable Laws of Organizational Structure , Berrett-Koehler, pp. 4-6.

Leavitt, H.& Whistler, T. (1958) Management in the 1980’s, Harvard Business Review 36 (6) (1958), pp. 41–48.

Negandhi, A. (1975). “Comparative management and organizational theory: A marriage needed”, Academy of Management Journal, 18, pp. 334-343.

Reijswoud, VE van (1996). The structure of business communication: theory, model and application. PhD Thesis, Delft University of Technology, Delft.

Roberts, J. (2004) The Modern Firm: Organizational Design for Performance and Growth, Oxford University Press.

Robbins, SP, Bergman, R, Stagg, I & Coulter, M 2006, Management, 4th edn, Pearson Prentice Hall, Sydney.

Smith, K. G., Smith, K. A., Olian, J. D., Sims, H. P, Jr., O’ Bannon, D. P., & Scully, J. A. 1994. Top management team demography and process: The role of social integration and communication. Admin. Sci. Quart. 39, 412-438.

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