Relevance and Application of Modern Organisational Structures - Literature review Example

Leadership and Management Table of Contents Introduction 3 Organisation Structure 3 Function of Organisation Structure 4 Changes in the Work Environment 5 Relevance and Application of Modern Organisational Structures 6 Relationship between Culture and Structure 9 Handy’s Cultural Model 10 Examples of Organisations 11 Conclusion 12 References 13 Introduction Leadership can be acknowledged as locating a fresh way or vision for a group that is followed by the group. On the other hand, management is responsible for monitoring or directing people as well as resources in a group in accordance with the principles or values that have already been created. It is quite significant for both leadership and management to run in parallel. Though the two concepts are completely different, they are linked with each other. It is quite significant for the organisations to pay due attention towards the leadership as well as the management aspects in order to increase the efficacy of the overall organisation (The Wall Street Journal, 2012). The main objective of the paper is to identify the changing nature of the work environment and the relevance and the application of recent approaches to organisational structure. The study will also endeavour to identify if any association between organisation structure and culture exists or not. The paper will also attempt to offer examples from recent organisations such as Ford Motor Company and McDonald’s and will demonstrate the organisation structures of these two organisations and how it tends to impact the culture as well. Organisation Structure By the term ‘organisation structure’, it can be comprehended as the framework around which a group is organised, the groundwork that keeps the coalition functioning. It serves as an operational manual directing the members how the organisation is put together and how it tends to operate. Structures tend to describe how the members are likely to be accepted in the organisation, how leadership is chosen and how the decisions are made (Dessein & et. al., 2005). Function of Organisation Structure The main function of the organisational structure is to create a chain of command or reporting structure among the employees. Chain of command signifies the pecking order or rank related to numerous workers. One of the most significant functions of the organisational structure is related to decision making. One of the imperative benefits related to the organisation structure is that if the organisational structure is flat then the decisions can be made quickly. Organisational structure can perk up the efficacy. In a functional organisation, where there is considerable number of departments, the department heads delegate project tasks to both directors as well as managers. These individuals generally take up the tasks with the help of numerous coordinators as well as analysts. Employees are held responsible for their individual tasks since all the employees work hard to complete their project on time. Those employees belonging to small companies are often organised in terms of product or geographical region are found to be more motivated. This implies that the organisational structure of smaller organisation is quite flexible enough to motivate the employees of the organisation. The organisations subsist in order to integrate corresponding activities in the presence of specialisation. The numerous structural dimensions of the organisational structure are connected with various activities happening within any controlled group of components behaving in a certain way to follow objectives. The information activity which is concerned with information flow among the members of the group is generally related with the coordination dimension. The monitoring activity which is related to the recuperation functionalities of the organisation is associated with control dimensions. A good organisational structure may assist in developing and administering a culture which is conducive for the members of the organisation. Cultural features of the organisation are normally thought to be those evolving in discussion and thus are regularly altering. In most of the cases, organisational culture identifies what the tasks assigned actually refer to, if they are valued as good or bad, right or wrong and the way in which they are conducted when the answers cannot be offered by formal structures, policies and processes. When the structural objectives of the organisation are bigger, the culture of the organisation carries organisational objectives. It can be mentioned that it is the organisational culture which identifies the appropriate as well as inappropriate behaviours that are generally reinforced by the structural emergencies for the members of the organisation. The main role of the organisational structure is to coordinate the activities of employees in a way that they work together in an effectual approach to execute a strategy thereby enhancing the competitive advantage. It also aims towards motivating employees and offer them with incentive to attain superior efficiency, quality, innovation and customer responsiveness. It is the organisational structure which determines the way in which people behave and thus establish how they will act in an organisational setting (Grossi & et. al., 2007). Changes in the Work Environment It has been noted that with the pace of time there has been major alterations in the demography, identity as well as technology which has led to the changes in the way businesses are conducted. Globalisation has been one of the patterns, which has directed to such transformations. Scientific management was grounded upon the belief that workers must be offered with simplified tasks and there must not be any kind of autonomy and responsibility imposed upon them. The organisations have been responding to such alterations in distinct way. Most of the organisations have been experiencing streamlining plans in order to gain greater productivity and efficiency and to adapt to the changes. Former approaches to organisation as well as management was based upon one particular type of structure and thus concentrated on quite a few features of the organisation. It can be observed that the classical approach paid due consideration towards the formal structure, technical needs of the organisation as well as general sets of principles. An assumption based upon rational as well as reasonable behavior existed. On the other hand, the human relations approach paid due attention towards the informal organisations and upon the emotional as well as social requirements of people at their work environment. The writers of the neo-human relations paid attention towards the personal alteration of individuals within the arrangement of the organisation within which the employee worked. It was normally supposed that all the team members in an organisation would work hard towards the attainment of the goals of the organisation. Due focus was upon the design of the structure thereby eliminating and alienating features of the work along with restrictions in efficient performance (Millett & Harvey, 2010). Relevance and Application of Modern Organisational Structures A bureaucracy can be defined as a logical, methodological as well as precise type of organisational structure where the various systems, regulations as well as methods of control are adequately defined. It can be observed that numerous other forms of organisational structure evolve from bureaucratic form of organisational structure. One of the noteworthy features of bureaucracy is that each single organisational unit is monitored as well as supervised by the higher level. Those organisations that are highly bureaucratic have precise job descriptions for the employees. One of the significant benefits availed from the bureaucracy is that it permits greater degree of activities (Indira Gandhi National Open University, 2012). Most of the business organisations possess line and staff organisation structure. With the organisations becoming quite complex, the issues related to the line executives have become quite complicated. The line executives are generalists and thus they require the knowledge as well as advice of the personnel who possess specialised awareness as well as capability to resolve these matters. It is because of this reason the employees’ positions are generated in an organisation. In case of such organisational structures, the authority flows from top to bottom and most of the tasks are generally performed by the line executives (Indira Gandhi National Open University, 2012). By assessing the contexts in which the firms operate, Burns and Stalker recognised two contradictory arrangements of management practice such as mechanistic system and organic system. It can be revealed that the mechanistic type of organisational structure is quite inflexible by its character and is apt for steady circumstances. The features of mechanistic organisation structure are almost similar to that of the bureaucracy. On the other hand, organic organisational structure is quite fluid structure which is adequate for the changing conditions. This organisational structure is found to play a major role in cases when the organisation faces any kind of new problems or unforeseen contexts constantly and thus necessitates actions to be taken outside the purview of the defined roles in the hierarchical structures (Indira Gandhi National Open University, 2012). The contingency approach to the organisational structure is more concerned with the situational components that lead to the alterations in the organisational structures. The contingency approach to the organisation structure assumes that the performance of the organisation is generally based upon the extent to which the structure goes with the existing unforeseen event. It can be revealed that numerous structures can be combined together. When one organisation structure has two forms of organisational structure then it is referred as matrix organisation structure. Matrix organisation possesses mix organisational structure. The reason behind this is that it is an amalgamation of two or more than two organisational structures. Matrix organisational structure faces the issue related to unity of command. This organisational structure is applicable in multi-project organisations. In matrix organisation structure, experts generally take the judgments and the decisions are likely to be quite beneficial and favourable for the company. It assists the higher level authority to focus upon the strategic planning (Northern Arizona University, 2012). Relationship between Culture and Structure Culture in the context of the organisation can be recognised as the way in which the group or a particular nation thinks, feels, believes and acts. It can be defined as the complex whole consisting of customs, beliefs, morals, knowledge or any other form of competencies which is acquired by the members of the society. According to Schein (1985), organisational culture can be delineated as a structure of crucial suppositions which is either imaginary or created by a given group when it studies to cope up with the numerous issues of external adjustment and internal assimilation which can be considered as legitimate because they worked well. It can further be taught to other new members as one of the correct ways to think, feel and observe in relation to those issues (Kong, 2003). Handy’s Cultural Model According to Handy, an organisation can be divided into four main cultures such as power, role, task and people. According to him, power culture is a web which depicts the concentration of power of a family-owned business which might be small or large. Role culture in an organisation is typified as a Greek temple and it has been typecasted as demonstrating bureaucracy. In such organisational cultures, documentation is of topmost priority because it is run by paper. An authority is primarily observed not to be dependent upon personal initiative, and is basically stated by job descriptions. This form of culture is best suitable for an organisation which is not faced with constant change. In case of task culture, an organisation is continuously subjected to change and needs to generate temporary task team for the purpose of meeting their needs. In case of people culture, the individuals in the structure identify the direction pursued by the organisation (The Open University, 2012). Therefore, it can be revealed that there is close association between organisational culture and organisational structure. Organisational structure is a process by means of which the work of an organisation is integrated with proper supervision and authority for the purpose of generating the results which are expected to be attained from the organisational culture. It can be stated that an effective organisational culture possesses a strong as well as precise organisational structure. The success of a company which meets the objectives of the organisational culture is dependent upon possessing an efficient set up relationship between organisational structure as well as culture. Examples of Organisations It can be revealed that McDonald’s Corporation makes use of bureaucratic organisational structure in their organisation. In this organisation, the authority is hierarchical. The individual McDonald’s franchisees are essentially monitored by the corporate offices and the employees at each of the franchisee are monitored by the superiors (Sage Publication, 2007). In this organisation, the administrative decisions, rules and regulations are recorded in a standardised format. The organisational culture of McDonald’s is such that the decisions are made by the upper-level management and the lower-level management is supposed to follow them (Browne & et. al., 2012). On the other hand, it has been observed that Ford Motor Company makes use of matrix organisational structure in its organisation. The company focuses upon bringing regular changes in its policies and business tactics so that it can stay ahead of its competitors (Schein, 2010). The organisational culture of the company focuses upon keeping close relations with the stakeholders (Oxbridge Writers, 2012). Conclusion With the alteration in the global business environment, it has been apparent that companies are bringing significant alterations in their organisational structures as well. In the previous times, the organisations used to focus upon any one form of organisational structure. However, in the modern times, complexities in the business organisation have necessitated the companies to follow one or a combination of organisation structures to ease their overall efficiencies. It is apparent that there is close link between organisational structure and organisational culture. If the organisational structure is well-constructed then the culture of the organisation also is observed to be effectual. References Browne, A. E. & et. al., 2012. McDonald: A Process Culture. Evaluation. [Online] Available at: http://www.slideshare.net/TeamA/mcdonalds-a-process-culture [Accessed May 03, 2012]. Dessein, W. & et. al., 2005. Coordination and Control in Organizations. Abstract. [Online] Available at: http://idei.fr/doc/conf/jjl/papers/152dessein.pdf [Accessed May 03, 2012]. Grossi, D. & et. al., 2007. “Organizational Structure and Responsibility”, Artif Intell Law. Vol: 15, pp: 223–249. Indira Gandhi National Open University, 2012. Typology of Organisation Structures. Line and Staff Organisation. [Online] Available at: http://www.egyankosh.ac.in/bitstream/123456789/35240/1/Unit-3.pdf [Accessed May 03, 2012]. Kong, S., 2003. “A Portrait of Chinese Enterprise through the Lens of Organizational Culture”, Asian Academy of Management Journal. Vol: 8, Iss: 1, pp: 83–102. Millett, B. & Harvey, S., 2010. Understanding Organisations: Identifying Trends and Changes. Introduction. [Online] Available at: http://www.usq.edu.au/extrafiles/business/journals/HRMJournal/AJMOBarticles/Org-trends-MillettHarvey.pdf [Accessed May 03, 2012]. Northern Arizona University, 2012. Organization Structure, Culture, and Change. Bureaucracy As A Form Of Organization. [Online] Available at: http://oak.ucc.nau.edu/cvb23/ADM540/Reviews/DubrinReview08.pdf [Accessed May 03, 2012]. Oxbridge Writers, 2012. Organizational Strategies of Ford Motor Company. Background. [Online] Available at: http://www.oxbridgewriters.com/essays/marketing/organizational-strategies-of-ford-motor-company_1.php [Accessed May 03, 2012]. Sage Publication, 2007. Bureaucratic Organisation. The Rise of Bureaucratic Organization. [Online] Available at: http://www.sagepub.com/upm-data/19284_Chapter_5.pdf [Accessed May 03, 2012]. Schein, E. H., 2010. Organizational Culture and Leadership. John Wiley & Sons. The Open University, 2012. Handy’s Four Types of Organisational Cultures. Power Culture. [Online] Available at: http://openlearn.open.ac.uk/mod/oucontent/view.php?id=403948§ion=3.5.2 [Accessed May 03, 2012]. The Wall Street Journal, 2012. What is the Difference Between Management and Leadership. Management. [Online] Available at: http://guides.wsj.com/management/developing-a-leadership-style/what-is-the-difference-between-management-and-leadership/ [Accessed May 03, 2012]. Read More