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The use of an Organizational Structure

Paper Type: Free Essay Subject: Business
Wordcount: 4399 words Published: 1st Jan 2015

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This analytical study is about organisational structures. Organisations are in also kind of formal structures that always targeted to achieve some set goals. For that purposes organisations develop some structures that make organisations move towards achievement of those goals. These structures are can be said as structures with in a wide structure f organisation and these are always decisive in the organisational success. In this study we are going to see what the purposes of all organisational structure are and how the structures are developed. We will also study some set and well defined models for organisational structure development. We will start with definitions of structure and then will find what kind of important role different structure play in any organisation.

This study will follow theoretical and analytical approach as we are going to see the analytical study of organisational structures.

Definition and Brief about Organisational Structures

Organisation can be defined as “Responsibilities, authorities and relations organized in such a way as to enable the organization to perform their duties”.

Organizational structure and organizational units defined to work and keep the flow to of work at unit level systems which have separate unit goals. We can say that all formal and informal framework of policies and laws, in which a regulatory organization under its power lines keeps the communications, assigns roles and rights. Organizational structure will decide the method and degree to which authority plays tasks are allocated, regulated, and managed. It’s how the information actually flow between different management levels. This structure depends entirely on the objectives and strategies chosen to achieve them by the organisations. There are Centralized structures, where decisions on the top layer of management is focused and tight control over agencies and departments be applied. In a decentralized structure, decision making power is distributed among offices and departments with varying degrees of independence.

Structure analysis or assessment to determine how to develop structure and working strategy that can work together, to best benefit of company’s productivity and its effectiveness to increase profitability. We can develop effective structure plans for the future of the organization based on understanding that

1 People focus on key aspects of their role

2 activities to be reduce as much as possible

3 eliminate the interference or duplication

4 reduce the number of management levels

5 increase productivity

Figure One: Organisational structures configuration

Source: http://www.provenmodels.com/files/12c0c714f6cde33bc307e678daadcf66/five_structural_configurati.gif

Organizational structure consists of such activities as task allocation, coordination and supervision, towards the achievement of organizational goals directed can also view it as a glass or perspective through which people view your organization the environment considered.

Many organizations, hierarchical structures, but not all.  One other type of organizations were institutions.  Organizations can be different in many ways, depending on the structure of your goals. Organizational structure in which the state will run it and do sets. Organizational structure allows to express allocation of responsibility for various functions and processes of various parties including the branch, division, workgroup and individual.

Organizational structure affects organizational action has two big way. First, it provides the foundation on which standard operating procedures and other routines. Second, it determines which individuals get to participate in the decision making process, and thus how their views have shaped the organization’s work. 

Growth, of big business as Ford Motor Company in America’s which largest automaker of the 1920s. Just coming out from temporary suppression of the Great Depression they having their vertical axis, bureaucratic structures as public attention has emerged focused due to it was survived from the effects of World War II. They need the restructuring as reconstruction after war started new economic growth. Which was powering the organizations to increase the size of in terms of sales revenue, personnel, and geographic. With growth, however, came increased complexity. Problem in United States business structure was revealed and new ideas began to appear. Employee motivation studies raise questions about traditional models.  Traditional ways to do a work gradually disappeared as the dominant logic started overcome. There was concern that the traditional organizational structure may hinder rather than help, was replaced by promoting creativity and innovation that both were necessary as the century wore on and the pressure to compete globally installed.

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Assessing the Structure of Management Systems

Systematic evaluation of assessment of the structures is organized on bases of the company’s conditions to internal and external environment and industry one is dealing with, and to what extent company has current and future needs. Output based management systems, structures, and processes review is taken in a written report (or series of written reports). Basic purpose of this is to make. Assessment of strengths and limitations of the current structure of the company (with respect to meeting long-term strategic needs) describe and evaluate alternative structures in the long term future of the company needs to meet recommendations to improve the systems needed to effectively support the implementation of the company strategy it is adopting

Step in the development and project management structure proposed and changing

qualifications of structure is intended to address.

We see it with questions like what kind of structure needed to support effective / efficient accomplishment of long-term company strategic objectives. How to structure assessment will be conducted? For this we need to see the structures of three levels.

1. Macro structure

2. Micro structure

3. Support systems

Basic steps in the structural analysis are as following steps:

Step one: Evaluate the company strategic objectives, work is ongoing, and has dedicated resources.

Step two: define the structural requirements for the company to meet strategic objectives.

Step three: propose alternative organizational structure and evaluate them against requirements to determine the structural strengths and limitations, and general “expenses” and “interests” of each structure.

Step four: Working with company management, selecting the desired future structure of the alternative analysis,

Step Five: Transfer a program to help companies move from their current structure next to the structure that will best support its strategic objectives.

Mintzberg’s organizational design

Henry Mintzberg (1983) made analysis of organizational design and he identified five forms of organization. Though some ideal configurations of these designs do not exist in the real world, but it is good for the guidance of consultants and managers because it provides a framework for understanding organizational structure and design synthesis.


Mintzberg defined organizational structure, “the sum total of the ways in which the division of labour to specific tasks is made and then to achieve coordination among them.” Each configuration includes six components according to him.

1. Main factors: it’s about the people directly to the production of related products and services.

2. Strategic apex: it’s about serving the needs of those who control the organization.

3. Middle line: its focuses that managers keep in touch with the top of the strategic core as operating needs.

4. technostructure: analysts who design, plan, change or instruct the core operating needs.

5. Support staff: professionals who provide support to organizations outside of the operating central activities.

6. Ideology: traditions and beliefs that make a unique organization.


Components of this division are related by four important aspects of Authority, Working materials, Information and Decision Processes.


All the Structure depends on its organization, its members, power distribution, environmental and technical systems. While the circles like the constellations work is independent of those decisions on the appropriate level in the hierarchy of their work. These groups range from informal to formal. Mintzberg made that these consultations are based on components used, contemporary needs of work and coordination mechanisms. He made the five settings:


Simple structure: Entrepreneurial setting: based on direct supervision of the strategic top, CEO etc. 

Machine bureaucracy: in large organizations the processes rely on standardization work by the techno structure.

Professional bureaucracy: in Professional Services where there is Standards based professional operating in the core according to skills and knowledge.

Divisionalised Form: it’s in Multidivisional organization that relies on standard output and where middle line is independent representative in conduct.

Adhocracy: its project based organization, very organic with little formal structure, relies on mutual adjustment as the key coordinating mechanism within and between these teams of project. 

Later Mintzberg (1979 ) added two more forms

Donation Form: based on standardization of norms where coordination occurs normally is kept in ideology or faith based.

Political Form: There is no coordination predominantly and the formation is controlled by the union base.

There are also six coordinate base mechanisms that is mutual compatibility (among core, coordinated among his people, the only means under very difficult conditions) the direct supervision of (from top to core) standardization of work processes by technostructure core standard output (not what is done but what will the result) Skill standards (working standards) – standardization of norms (a set of shared beliefs)

While Some design parameters that can be changed there. These fall into several categories like Specialty Work, Official Behaviour, Compulsory Training, Planning always ahead of time and control. Whether it is vertical Decentralization or horizontal.

Factors effecting Structure Choice

There are some situational factors that influence choosing design parameters and vice versa. As if we see age and size the older, more formal the structures behaviour is similarly the larger more formal behaviour adopts.

1. Technical systems

2. Is more, the more official and administrative work

3. More complex, more elaborate administrative structure

4. Bureaucratic structure of the core automation operating office moved to an organic

5. Environment: More dynamic than the organic structure

6. More complex, more decentralized structure

7. More variety of markets, greater tendency to divide the market based on units

8. Extreme hostility drives centralized structure temporarily

9. Differences in contact work environment for different constellations

10. Power

11. More focused and more foreign control of the official structure

12. Who needs the power boost centralized structures

13. Fashion Day benefit structure

In these six basic settings a simple structure: just some of the core operating and senior management – Machine Bureaucracy: Government with more detailed technostructure and support. – A professional bureaucracy: the standard of skill and not the processes, and hence greater support technostructure – Form divisionalized: Several dinner – Structure – adhocracy: This is for companies that need to structure the project, the creative team dominated the drag to work do. – Amount: Drag to evangelize, loose parts of the work, little expertise, often very young company


Each arrangement represents the force that makes the organization to be structured in different directions. For example, worker wants to drive in way of their control over work. Therefore, they favor a professional bureaucracy based on skill standards.


Structure selected depends largely on the powers within organisation. For Mintzberg (1983) this classification is based on the assumption that formal and informal structures are intertwined and often indistinguishable from one another. Formal structures evolve over time and changes in the structure of the official unofficial. This model provides a possible structural synthesis is important literature. Model does operational activities designed to help enterprise (again) to not offer it lacks a normative framework. This Model depends on the potential factors that affect the structure. Theory faces several possible methods of problems: for example how it may be just one factor out of the complexity of reality and how these factors do to one another. Most organizations work in a dynamic and complex environment, thus some limits of the relevance of this model operate.

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Operational organization and informal organization

Organizational structure cannot be set simultaneously with reality, evolving operational in practice. Such a difference in performance is reduced when developing.  Organizational structure work to prevent mistakes that may be a result of cooperation prevented the completion of orders in a timely fashion and within budget and resources. Organizational structure must be adaptive to the process conditions, and efforts aim to optimize input to output ratio. This is the main difference between operational organization and informal.

Hierarchical organization Flat organization

Organizational structure of ancient hunters and gathering of tribal organization through a very royal and religious power structures to industrial structures and post-industrial structure of developed today.

organizational structure matter of choice when the 1930s, riots began as a theory of human relations are known was intended, there is still denial of the idea structure is an artefact, but instead advocate a different type of structure, which requires knowledge, and comments employee may be given greater recognition. “However, different views emerged in the 1960s , shows that the organizational structure “foreign phenomenon is caused, rather than a result achieved.”  In the twenty-first century, organizational theorists such as Lim, Griffiths, and Sambrook (2010) again suggested that the development of organizational structure largely dependent expression strategies and behaviour management and employees as distribution of power between them limited and influenced by their environment, and outcome. 

Types of Organizational Structure

The structures in majority of organizations are smaller and best work for solving simple problems.  Strategic leaders of organisations can make important decisions and most times communication is made by one person in conversation. This is always practical for new business to make possible the growth and development under the control of founders. The charismatic power and conventional domination of the authority is defined by the Max Weber as feature of these early starts.

Bureaucratic or Administrative structures

Weber gives the relationship (1978) that “a fully developed administrative mechanisms compared with other organizations exactly as does the machine with non-mechanical modes of production compared.” Accuracy, speed, non-ambiguity, follow stringent, reducing friction and material and personal costs in this highly bureaucratic system as state is good example of this. Bureaucratic structures a certain degree of standard. They are better for more complex or large-scale organizations is appropriate. They usually adopt a long structure.  The thing about all the administrative structure is not. Very, very complex and useful structures, hierarchical organizations, primarily in organizations is long.

Functional Structure

Functional organization within the sector employees tend to perform a set of specialized tasks, for example, is the engineering department employees only with software engineers. This leads to operational efficiencies in the group. However it can also lack of communication between functional groups in the organization will lead the organization to build and inflexible.

As a whole, an organization is operating as the best producer of standard products and services in large volume and low cost is suitable. Coordination and specialization of tasks are focused on the structure function, which produces a limited amount of products or services effectively and predictably. In addition, further efficiencies can be realized as functional integration of their activities organized vertically so that the products are sold and distributed quickly and cost-effectiveness. For example, small business can start making the parts for their production instead of procuring it from outside organization. But not only benefit employees but also for religious organizations is needed.

Divisional structure

Also called “product structure”, group divisional organizational structure, each function section. Each section within the divisional structure contains all the necessary resources and functions within it. Units can be from different parts of the classified. There could be made based on the distinction (section section United States and Europe Union) or on geographical product / service based (different products for different customers: the family or company).Another example, car companies may be a divisional structure, Department for SUVs, another division for cars subcompact, and the other part is for sedans. Each section its sales, engineering and marketing have.

Structure Matrix

Matrix structure, function groups by both staff and product. This structure can combine the best of both structures separately. Most organizations using matrix team of workers to do work, in order to take advantage of strengths, as well as make up for weaknesses, functional and decentralized forms. For example, a company that can produce two products, “product” and “product B”. Using a matrix structure, the company functions within the company is organized as follows: “product” sales, “product” customer service “product” accounting, the “B product” sales, “Product B” services to customers Section “B product” accounting. Matrix structure is among the purest in the organizational structure, a simple network emulation discipline and order in Nature showed.

Weak / Functional Matrix: Project Manager, with only limited power is assigned to oversee cross-functional aspects of the project. Functional managers maintain control over their resources and areas of the project.

Balanced / function matrix: the project manager is assigned to oversee the project. Power equally between the project manager and functional managers is shared. However, as the most difficult system to maintain the power-sharing proposition is elegant.

Strong / Project Matrix: Project Manager primarily responsible for the project. Functional managers provide technical knowledge and resources as needed.

Among the matrix, not the best format there is always successful implementation depends on the purpose and function of the organization.

Circle organization

Planar structure is common in entrepreneurial start-ups, university spin-offs or small business in general. As the company grows, however, it is more complex and hierarchical, leading to an expanded structure, with more levels and offices.

Often, it bureaucracy, the most common structure in the past lead.It is still, however, related in the former Soviet Union and China, as well as most government agencies around the world. Shell Group is used to show the kind of bureaucracy: Top heavy and hierarchical. This includes various levels of command and duplicate existing services companies in several areas. All of these skins made concerned the market changes, leading to their incapacity to grow and develop. The main reason for the failure to change the structure of the Company became a matrix.

Starbucks is one of the large organizations that have successfully developed many supporting the structure matrix has focused its strategy. The combination of design based on product performance, with employees reporting to the ends. Build team spirit, because the company employees in their decision-making and training them to develop both hard and soft skills. That makes Starbucks one of the best in customer service.

Some experts also multinational design, common in companies, like global Procter & Gamble, Toyota and Unilever noted. This structure can be a complex form of the matrix is seen to preserve harmony among its products, functions and geographic areas.

In general, during the past decade, it has become increasingly clear that through the forces of globalization, competition and customer demand, the structure of many companies has become flatter, less hierarchical, more fluid even virtual. 


One of the new organizational structures developed in the 20th Century is team. In small business, organization structure, the whole team can be defined. Teams can be both horizontal and vertical. While the organization formed as a collection of people’s competencies synergize to reach newer and quality dimensions of organizational structure revolves around the competencies of the team total. For example, each Store all foods market, the largest natural foods grocer in the United States in developing a focused strategy, autonomous profit center composed of an average of 10 teams are successful, while Team leaders in each store and each region as a team. Large organizations can use administrative flexibility of the team and also benefit. Xerox, Motorola, and DaimlerChrysler all the companies that actively use teams to perform tasks.


Another structure is a modern network. While the risk of becoming a giant business too clumsy to proact (like), behavior and react efficiently [18], a new network contract performance business organizations exist, which can be done better or cheaper. In fact, the structure of the network administrators spend most of their time coordinating and control of foreign relations, often using electronic.H & M clothing is outsourcing its network of 700 suppliers, more than two thirds of them low-cost Asian countries. Not having any factory, H & M can be more flexible than the large retailers to reduce its cost, which aligns with its strategy of low cost.Opportunities offered by recent advances in the management potential of complex network theory have shown, including applications to product design and development, and the problem of innovation in the markets and industries


Special form of virtual boundaryless organization. Hedberg, Dahlgren, Hansson, and Olve (1999) in the virtual organization, not as physical as it is available, but enabled by the software there.[23] There is a virtual organization within a network of alliances, using the Internet. This means that while the core of this organization can be small, but still the company’s worldwide work could be a market leader in its niche. According to Anderson, because of the unlimited shelf space of the website, the cost to reach niche shops dramatically falling. Although none of the lots sold, many niche products that in total they make substantial profits there, and that’s what made Amazon.com so successful creative


When any working group is small and often indulges in direct communication then formal structure may be unnecessary. Over all organizations should make decisions about delegation of tasks and powers through some methods. In many organizations size and complexity, their staff, responsibilities, and for managers who to report are defined.  Organizational structure that is best for some organization depends on diversity of the factors, including the nature of its work its size and geographic positions. Organisations can look for several structural changes based on few principals. Explanation of alternating organizational structures that included all those structures which are arranged by the product, function or geography and their future can be made through different means.

Never the less all parts of an organization need each other to work in a unit of organisation to achieve organisational goals. Important changes in organizational design that happened in last few decades have been demanding to understand the nature of this dependency so that organizational performance could be improved.  Different perspective on this issue of interdependence can be compared in an organic organization with the mechanical one model can be easily seen. Traditional mechanistic structure is very complex as it makes an emphasis on job speciality, the bureaucratic structure strongly underlines definite actions and protocol and while power structure focuses on accountability.  All the decision making and goal setting processes at any level must be shared and communication flows should be made free in the organization.

In first half of last century due to size traditional rule was fir for all organisational structures. Now in the new century a changed thinking about organizational structure is there though still there is an enormous management challenge but this change is necessary condition for success.


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