PM- Week 2

Models and Methodologies- Activity 5- Organizational structures

There are so many different structures because they drive the way in which business is done. Everyone has a different view as to which structure will be the best fit for a business and the answer will also be different for each type of industry. There are many factors to consider when developing the structure of an organization such as size of the company, if it is in one geographic area or divided into separate regions. There is not one structure that will serve the needs of every company. It does not make sense for a small company with three or four employees to have a tall vertical complexity in the same way that a large corporation cannot have a flat structure. A company that operates its business in one geographic region may choose to have centralized decision making and run effectively. If a company were to operate across many regions it is necessary for decision making to be decentralized at least to an extent. Otherwise there would be a lot of time wasted having every single decision approved by one person.

It is possible for the structure of a business to impede its performance. If the structure is too mechanistic there could be problems with communication and sharing of information throughout the company. This kind of structure could cause employees to become bored with repetitive tasks and productivity could go down.

If there is not enough structure it could cause the business to be too disorganized and there would be shirking among employees. Another problem with this kind of structure is that it would be difficult for employees to know what their duties are. It really depends on the business because an organic structure can promote innovation in a company because it allows employees to think outside the box and come up with ideas that they might not have thought of if they were working in a mechanistic structure.

I have experienced first hand the ways in which the structure of an organization can affect performance. When I began working at my current job, the structure of the organization was very organic. Employee’s schedules were basically whenever they wanted to go, and there was little accountability for the work that needed to be done. This type of structure was not working at all. There was no work being done in the office because the “flexibility” was being taken advantage of. The work ethic among employees was very poor. Presently, there are many changes being made to the structure of the organization. In the little time frame that has passed since the changes began I can see a big improvement with productivity in the company and employees are enjoying their work more.

The ideal structure for me would be one with a moderate level of formalization and fairly decentralized decision making. I feel that I would work the best in an organization which is a median between mechanistic and organic structures.

One type of structure that I feel would be very effective is a networked or virtual structure. I’m not sure that I would like to work in this type of organization, but I think that the use of independent contractors working together will have a greater possibility of success. This is because there is competition for the contracts being negotiated. Each contractor will work hard in their respective areas with the hope of winning more contracts in the future. It is in the best interest of the contractor to work well because it will bring them economic benefit. If the contractor does not work efficiently they can be easily replaced.

References

Course Notes Topic 2.3
http://www.sbea.mtu.edu/smgoltz/ba3700/OrgStructure.html
http://en.wikipedia.org/wiki/Organizational_structure
http://choo.fis.utoronto.ca/FIS/Courses/LIS1230/LIS1230sharma/od2.htm