Which Of The Following Is Formed To Solve Specific Quality, Service Or Productivity Problems?

What you lot'll learn to do: Describe the various organizational structures and their history

When the US economy went from the general store on the corner to the boom of manufacturing and the industrial revolution, there was a demand to look at businesses differently. Of a sudden, there were non two or iii employees in a concern, at that place were hundreds. There was non just ane group of tasks to complete, at that place were dozens.

Just as we looked to our team members to decide how to motivate them and make them more than productive, we began to study organizational structure to determine how that had an influence. Organizational structure brings together Taylor's ideas of work specialization, Fayol's ideas of chain of control, and Weber's hierarchy to add to the productivity and efficiency of concern.

Learning Outcomes

• Hash out the elements of organizational structure
• Discuss common organizational structures and their historical origins
• Identify modern organizational design options

What is Organizational Structure?

A worker reports to a manager. A manager reports to a manager, a director reports to a vice president, and a vice president reports to a C-level senior leader, similar a chief executive officeholder or a chief administrative officer. If you've e'er worked in a corporate setting, you're likely to recognize this as the bones set of layers of an arrangement's structure.

Organizational construction defines how job tasks are formally divided, grouped, and coordinated. The structure of an system commonly features half-dozen dissimilar elements:

• Work specialization
• Departmentalization
• Chain of command
• Bridge of control
• Centralization and decentralization
• Formalization

Exercise Question

Now that we sympathize merely what organizational structure is, let's take a await at each one of its elements, so we can better empathise how organizations choose to structure themselves to maximize productivity.

Work Specialization

Before, we studied Frederick Winslow Taylor, who researched fourth dimension and motion and determined the almost efficient ways for workers to practise their tasks. Taylor's "ane correct way" was the birth of work specialization. When Henry Ford conceived the assembly line, he tossed aside "one best way" and viewed work specialization with an centre toward continued comeback. Work specialization describes the degree to which activities in the arrangement are divided, so subdivided, into dissever jobs.

If you put one worker on the task of edifice an car, he might still be building it a month or two later on. But if y'all accept one worker that's focused on installing right front tires, and another who is focused on left front fenders, then those tasks become standardized. Employees learn to do them quickly with practice.

By the 1940s, well-nigh manufacturers were practicing work specialization, or "division of labor" as it'due south sometimes chosen. Work specialization was platonic from a task point of view—easy tasks could be done by unskilled labor, and those tasks that required more skill could be separated out and addressed by employees that possessed those skills. Those skilled employees weren't wasting their time on tasks they didn't take to be doing.

Work specialization was as well platonic from a productivity point of view. Installation of brake pads requires different tools than the installation of a tire, and when workers were assigned to one of those tasks instead of both, tools didn't demand to be taken out and put away. Employees could cheaply be trained to do one specific task, and many employees, each trained to do their specific chore, could gather highly complex machinery quicker and easier than one highly trained employee that possessed all the skills to complete the assembly.

Manufacturers continued to tinker with and fine-tune worker specialization to increase productivity until the 1960s, when it became articulate that a good thing could be taken too far. Colorlessness, stress, low productivity, increased absenteeism and turnover offset higher productivity. Manufacturers responded by enlarging worker specialization, including more than tasks within a position to increase date.

Departmentalization

Once jobs are divided up through work specialization, those jobs need to be combined together to coordinate mutual tasks. Departmentalization is the basis by which jobs are grouped together. Jobs tin be grouped in the following means.

• Part. This is among the virtually popular way to grouping activities. Corporations might have a supply concatenation office, a finance office, a human being resource function. All the worker specializations for those areas are grouped together, and people with common skills piece of work in common units.
• Product. A large manufacturing company might group its common tasks together by product. A newspaper products manufacturer might take a section for office newspaper, and other department for bathroom tissues, and withal some other for cartons. The major advantage of organizing common tasks this mode is to increment employee accountability for the success of those products.
• Geography. If an organization's customers are scattered over a geographic region, an organization might choose to group mutual tasks geographically. A company that has a Southward, Midwest, and Eastern sales function is organizing around territory, or geography.
• Process. A manufacturing plant might choose to organize common tasks around process. A tubing plant might organize departments around casting, pressing, finishing, packaging, etc. Each department specializes in one particular function of the manufacturing process. The same kind of departmentalization is true of the Section of Motor Vehicles, where you proceed from one area to another to renew your license plates or your driver'due south license.
• Customer. A business might cull to combine tasks effectually the type of customer it serves. For instance, a service similar Dropbox.com has free file sharing and deject storage for its individual users, just there is as well a department of Dropbox that services business clients.

Large corporations can use any or all of these types of departmentalization to organize themselves. They might have a manufacturing area that organizes itself around process, merely and so a sales department that is organized geographically and a corporate support heart that's organized functionally.

Concatenation of Command

The chain of command is the unbroken line of authority that extends from the top of the organization (due east.one thousand., the CEO or the President) to the everyman echelon and clarifies who reports to whom. At the offset we talked most managers reporting to directors, who reported to vice presidents who reported to C-level leaders. Such is the chain of command.

Two boosted concepts go along with the thought of chain of control. The first, authority, describes the rights inherent in a managerial position to give orders and to look the orders to exist obeyed. The second, unity of control, describes the concept that a subordinate should merely have ane superior to whom he or she is direct responsible. If unity of command doesn't exist, there's a likelihood that a subordinate will be responding to commands from dissimilar people and experiencing a dilemma of competing priorities, which isn't productive.

We learned well-nigh Henri Fayol and his theories around management, particularly chain of command and unity of control. These principles used to be a cornerstone of organizational structure, but advancements in applied science and the trend toward empowering employees makes this less relevant today, but the chain of command element is not going to disappear any fourth dimension soon.

Span of Control

Span of control deals with the number of subordinates a director can effectively direct. The wider an arrangement can make its managers' spans of control the more than efficient it volition be. Wider spans of control save money.

Consider the span of control of the visitor represented in the cartoon in a higher place in blue. The bluish company has 5,461 employees and half-dozen levels of managers to manage them (all but the bottom layer of 4,096). Let's say those managers make $l,000 apiece. The total payroll for i,365 managers making $50,000 apiece is $68,250,000.

If we expect at the green company, we still take a bottom layer of 4,096, simply less managers overall managing them. If the green visitor's 585 managers each make $l,000, the dark-green visitor's total payroll for those managers is $29,250,000. That's a huge savings.

Small spans of control are not only expensive, but they tend to complicate advice up and down the organization. The more than layers, the more the message has to travel from manager to manager. Narrower spans of control as well encourage overly tight supervision and less employee creativity and empowerment. In contempo years, the trend has been toward wider spans of command.

Centralization and Decentralization

Centralization refers to the caste to which decision making is concentrated at a single point in the arrangement.

In a decentralized organization, employees are empowered to make decisions, so action tin can exist taken chop-chop to solve issues, and employee input is considered. The more lower-level employees have the power to make decisions, the more decentralized an organization is.

In a centralized organisation, upper management makes all decisions and lower management is in that location to carry those decisions out.

Formalization

Formalization refers to the degree to which jobs within the system are standardized. An employee in a highly formalized task has little input equally to how that job is done, when information technology'south washed or how it should be done.

A worker on the associates line is probably in a highly formalized job, where he doesn't have much say in how he does his job. An accounts payable acquaintance too doesn't have a lot of say in how those many invoices are processed, but her job is probably a little less formalized than the assembly line worker. A sales associate, out calling on customers, may have very fiddling formalization in his chore.

Exercise Question

Now that we understand the half dozen elements that figure into organizational structure, let's take a look at some common configurations of organizational structure and in what instances they are used.

History of Common Structures

Fayol introduced concatenation of command, separation of jobs, power, and authority; Weber introduced the bureaucratic arroyo, and Taylor introduced job specialization. They championed the idea of structure within an system to support efficiency and effective operations, but they never actually prescribed what an organizational construction should expect like. In fact, organizational structure was a matter of choice and could differ from organization to organization. The only benchmark for whatever proposed structure was that information technology exist constructive.

It wasn't until the 1930s that organizational structures started becoming a bit more standard. As human relations theory took hold, researchers pondered an organizational structure that would allow for the needs, knowledge and opinions of employees to be better recognized.

An organisation'south structure contains the half dozen elements we described, and is laid out in such a way that employees are able to, exist productive, make a profit, and achieve the organization's mission. Let's take a look at some of the older, simpler organizational structures that companies have adopted. They're still very much in use today.

The Simple Structure

The simple construction is aptly named because, well, there's only non much to it. Simple structures have

• A depression degree of departmentalization
• Wide spans of command
• Centralized authority
• Picayune formalization

The typical simple organization structure is apartment:

This type of organizational structure is cheap to maintain and accountability is very articulate. However, it'south difficult to maintain this kind of structure in any but a small organization. When this kind of system structure increases in size, conclusion making slows down and the manager becomes overly encumbered every bit the get-to determination maker for 50-100 people. It's as well risky – everything depends on one person, and should that person get sick or dice, it puts the concern in jeopardy.

The simple structure is often referred to as "pre-bureaucratic," in that it lacks a standardization of tasks.

Bureaucratic Structure

Bureaucratic organizational structures have a affiliate out of researcher Max Weber's volume, with conspicuously defined roles and responsibilities, hierarchical structure and respect for merit. This organizational structure is characterized by

• Highly routine operating tasks accomplished through specialization
• Very formalized rules and regulations
• Functional departmentalization
• Centralized authorisation
• Narrow spans of control
• Decision making that follows the chain of command

Bureaucratic organizational structures are pyramid-similar, with a CEO atop the chain of command in the corporate construction and a articulate chain of command underneath. A bureaucratic organizational structure might look similar this:

Bureaucratic organizational structures are ideal for organizations that require standardization (think banks, authorities offices). They're ideal for organizations looking for the ability to perform standard tasks highly efficiently. Organizations with bureaucratic structures tin can get by with less talented people at lower levels, because decision making nearly always falls to senior leaders.

The downfalls of bureaucratic structures are that they create silos – functional areas that often don't talk to each other.

If the bureaucratic organizational structure looks familiar, it'due south because it'south still tremendously popular with organizations today. Fifty-fifty as trends are irresolute toward teams and other types of structures that help businesses compete, organizations still hold onto the hierarchical construction of the bureaucratic structure as the norm.

The Matrix Structure

Matrix structure with geographic and product (SBU) structure.

A matrix structure creates dual lines of authority and combines functional and product departmentalization.

Ad agencies, hospitals, universities and management consulting firms apply the matrix organizational structure. It's easy to see why – by creating a dual reporting situation, a manager who's working with a company on advert would exist able to manage a team that included a representative from each of the needed areas to become a campaign running—a graphic designer, a space planner and then on.

This structure allows for the efficient allotment of specialists. Data is more easily exchanged, equally the contact between the dissimilar departments is increased.

The major disadvantage is the ability to become all these people moving at the aforementioned time, with articulate priorities, to deliver a solution that's on time and on budget. It can also create power struggles, because it tosses aside the idea of unity of command.

The matrix structure is among those that are considered "mail-bureaucratic," in that it does contrast in some means with Weber'southward ethics. That said, the matrix construction doesn't actually depart from Weber'south in that hierarchy and authority still exist here.

Exercise Question

Organizational structures continue to evolve to encounter the globalization and economic demands of today'south business world. Let's accept a look at some more mod types of structures.

Modernistic Organizational Design

"Post-bureaucratic" organizational structures go along to exist adult to enhance how organizations do business organization and remain competitive. Let's talk about some of these new options, designed to help organizations practice business organisation in today'south world.

The Team Structure

In an organizational structure based on teams, the structure breaks downward department barriers and decentralizes decision making to the level of the team. Team structures usually require employees to be generalists likewise every bit specialists.

A team construction tin define a whole company. Whole Foods Market boasts a team-based organizational construction, with the teams shaped around their departments within the shop—there was a produce team, a meat team, so on. Based on the shape of the organizational chart in Figure 1, you can empathize why Whole Foods refers to its mission statement as the "Declaration of Interdependence." Indeed, each of the teams is dependent on and answers to the other members of their ain team and the other teams.

Figure 1. Team-Based Organizational Chart

More oftentimes than not, when larger organizations decide to utilise teams, they practise and then as a part of a bureaucratic construction rather than a straight team construction. Moving from a bureaucratic to a team structure requires a great deal of change, so larger organizations will assemble teams and add together a quasi-team structure into their bureaucratic org chart.

Virtual Organization

A virtual system is a small, cadre arrangement that outsources major business organisation functions. Recall of information technology as "renting" departments rather than owning them.

Back in the early days of Hollywood, movies were made by big studios with large bureaucratic organizational structures and a laundry list of celebrities. Now, when you sit down down to watch a movie, y'all see several dissimilar production companies' logos on the screen earlier the motion-picture show even starts. It might begin with "Paramount." So y'all run across "Bad Robot." And maybe two other companies. Each one of those companies has played a function in making the film. During the credits, you encounter animation companies and sound editing companies. Paramount may exist acting equally the central "organization." The businesses to which Paramount sends work would make up the balance of the virtual organisation.

Effigy 2. Virtual Organizational Chart

The nautical chart in Effigy 2 illustrates a typical virtual system, which includes employees that practice flex-time in a abode role, ones that are in satellite offices domestically and internationally, then a group of independent contractors, telecommuters and vendors.

Paul Newman's food product visitor, Newman's Own, runs on a virtual organizational structure. Newman's Own employs only 18 people, and outsources almost everything—manufacturing, procurement, shipping and the like.

Large organizations dabbling in the virtual organizational structure unremarkably do then to outsource manufacturing. Thousands of well-known organizations are virtual in i style or another. General Motors, Nike, and Cisco are just a few of them. The flexibility a virtual arrangement provides is hard for organizations to resist, as it allows them to contract out any role they feel another organization tin do more cheaply than them.

The virtual organization is definitely on the other side of the spectrum from bureaucratic organizational structure. The bureaucratic organizational structure seeks control in multiple levels and, if there is a downfall to the virtual organizational construction, it is that at that place is far less control over the different parts of the business.

Boundaryless Organizational Structure

American business concern executive and former CEO of General Electric, Jack Welch, coined the term "boundaryless organization" when he described his platonic General Electrical. He wanted to eliminate vertical and horizontal boundaries within GE and break downwards barriers betwixt the company and its customers and suppliers.

When an organization removes the vertical boundaries, the hierarchy flattens. Status and rank are minimized. Functional departments create horizontal boundaries, and those boundaries tin can stifle interactions betwixt departments. Functional departments can be replaced with cross-functional teams, and activities tin can be organized around process.

General Electric used tools like 360 performance appraisals, where peers, subordinates and managers could evaluate an employee'southward performance. They put together cross-hierarchical teams and employed participative decision making processes.

The boundaryless organizational structure, when fully operational, breaks downwardly barriers to external partners (suppliers, customers, etc.) and barriers created by geography. Telecommuting blurs organizational boundaries every bit well. In fact, this construction relies heavily on technology to reach, and and so sometimes it's chosen the T-class construction.

Holacracy

This video explains the concept of holacracy every bit a method of decentralized management and organizational governance in which decision making and authority are distributed amid cocky-organizing teams.

Brian Robertson of Ternary Software in Exton, Pennsylvania, developed the organization of Holacracy by experimenting with more democratic forms of organizational structure. It'southward a flat system system, meaning there are few or no levels of centre direction between staff and executives. The objective behind a flat organizational arrangement is that employees are more than involved in the determination making process rather than being straight and closely supervised by many layers of direction.

The essential elements of Holacracy include:

• Roles instead of job descriptions. An individual can hold multiple roles within this construct. Roles are defined by each circle—or team—via a commonage governance procedure.
• Circle structure. Each circle is a squad. Circles are organized hierarchically and each circle is assigned a clear purpose and accountabilities by its broader circle. But the employees within that circle need to determine how to best achieve its goals. Each circle has a "lead link" and "rep link," and those people sit in the meetings of both their circle and the broader circumvolve to ensure alignment with the system's mission and strategy.
• Governance process. Circles utilize a defined process to create and regularly update its own roles and policies.
• Operational procedure. Circles align around operational needs and requires that each member of the circumvolve fulfill duties. Members have a lot of autonomy and authority and can decide on their own how to best achieve these goals.

Zappos is famously using the Holacracy model in their work, and they chose to use that model then they could provide excellent customer service. Their theory was that they were able to put client service decisions into the hands of the employees and eliminate burden on upper management.

It should be noted that the term "Holacracy" is a registered trademark of HolacracyOne, LLC.

Practice Question

Which modern organizational structure best positions an organization for success? Well, similar we mentioned, organizations—especially large ones—are committed to a bureaucratic org nautical chart, and whatsoever additional changes in this direction are sometimes incorporated into the bureaucratic structure.

Source: https://courses.lumenlearning.com/wmopen-organizationalbehavior/chapter/organizational-structures-and-their-history/

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