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ORGANIZATIONAL STRUCTURE & DESIGN

Organizing defined as arranging and structuring work to accomplish the organization’s goals. While organizational structure is the formal arrangement of jobs within an organization. Every management level will have to organize the company/organization, even the lower level manager. As a lower-level manager, the kind of organizing he will be doing is to be concerned with the design of specific jobs. He/she has to find out; should a job be done by individuals or teams? What tasks need to be completed? What’s the best way of completing these tasks? Who in the given department is best qualified for doing the tasks?

Nowadays, lower-level managers always are asked to participate in decisions that affect the structure above them. For example, a department supervisor might be on a committee involved with reorganizing her/his division.

Normally if we’re the manager, we have authority. But it is not necessary we will have power over people. Authority is the rights inherent in a managerial position to tell people what to do and expect them to do it. Authority is actually a subset or power. Power is the large concept. All managerial positions come with a degree of authority. But you don’t have to be a manager to have power. You have power if you have something that others want and which you control. People will look up to you, admire your expertise and accomplishment, and willing to follow your directives. In today’s organizations, a lot of technical specialist has power not because they have managerial authority, but because they have an expertise that others need.

Organizational structure that can be applied with several ways, such as;

1. Work specialization – dividing work activities into separate job tasks. Work specialization can be done either in groups or by individuals. Sometimes people will ask either working in groups will undermine work specialization. As a fact, teams can do specialized, repetitive, and routine activities too. Hence, no matter how hard or simple the job is, it can be done in groups. So, teams are not going to undermine work specialization.

2. Span of control – the number of employees a manager effectively and efficiently manage. To make sure the span of control structure being applied effectively by identifying the type of job being done, the amount of training and experience the workers have, the degree of formalization, and the presence or absence of supportive colleagues.

e.g : consider two company, company A have employees that are doing routine tasks, they’ve all been doing them for years, there are specific rules and regulations to govern their jobs, and department members help each other out with problems. The supervisor in this department might be able to directly oversee 20 or 25 people. While company B made up of mostly new employees with little experience. The jobs are complicated; the company doesn’t have many formal rules and regulations. And there are no manuals to go to when employees have a problem. Moreover, workers tend to be not friendly with each other. In such situation, a supervisor might not be able to handle more than 4 or 5 employees.

The most effective span of control depends on a number of contingency factors. The fact that organizations is giving managers wider spans is largely made possible by hiring people with better skills and providing these employees with increased training.

3. Formalization – how standardized on organization’s jobs are and the extent to which employees behaviour is guided by rules and procedures. There are pros and cons for high formalization, the pros are:

a. Reduces the need for tight supervision or a strong culture – the rules and regulations provide employees with guidance in how they should behave.

b. Allows organizations to hire less qualified and less costly applicants.
And the cons is costly to create and can demoralize workers who desire autonomy and decision discretion.

Amongst all the organizational structure, high specialization tends to increase organizational politics because it creates separate groups that people try to protect. While high formalization tends to reduce politics because of the rules and regulations. Narrow spans of control probably discourage politics because managers have a closer contact with employees and so they are likely to have clearer and more accurate picture of employee performance. This makes it harder for people to act politically and to promote their self-interest.

Organizational Design Decision

There are two types of organizational design, i.e:

1. Organic structure – highly adaptive and flexible.
2. Mechanistic structure – rigid and tightly controlled.

Managers have choices which organizational structure to implement. They can choose between mechanistic and organic forms. Which one they select depends on four variables of contingency approach, which are size, technology, strategy and environment. Mechanistic structure is better matched to cost-minimization strategies, large size, routine technology and a stable environment. Organic structure work best with innovative strategies, small size, non-routine technologies and a dynamic environment.

Because of the increase in environmental uncertainty, for a better respond to global competition, for example, companies need greater flexibility which offered by organic structure.