Organization Theory and Structure - Essay Example

Organization theory and structure Every organization with more than one person needs some form of structure. Organizations are structured in a variety of ways, which is largely dependant on the objectives of the organization and the culture that it is established. The structure of the organization is very important as it determines the manner of operations and the performance of the organization. Structuring an organization helps retain order and creativity in an organization as roles will be clearly defined, objectives will be set accordingly and the managerial workload will be reduced significantly as the subordinates place is quite clear and not an object of controversy. Some factors that influence organizational structure are size, the products, skills and talents found in the organization and most structures will mainly be based on these factors. Different theories have been placed forth about why different organizations have the structures they do. According to Abraham Maslow, organizational structures mainly depend on their needs. In his works he clearly places these needs in a hierarchy system where the satisfaction of one level of needs leads to the organization striving to fulfill the other levels of needs of the organization. These needs, in order of priority are; physiological needs such as food and shelter, safety needs such as safety in the environment, social needs like love and friendship, esteem needs like self respect and status and at the top of the hierarchy is self actualization which is actually reaching one's full potential. A good organizational structure should be one that aids in fulfilling these needs among employees in the organization in order to maximize output. Herzberg insists that intrinsic factors are related to job satisfaction while extrinsic factors lead to job dissatisfaction. The structure and job environment that is positive creates interactions leading to self-esteem that improves quality of work. He insists that factors such as recognition, responsibility, the work itself makes up for some of the motivators creating job satisfaction. The factors that lead to dissatisfaction are supervision, company policy, salary, relationship with peers and subordinates. It is therefore paramount that the organizational structure supports job satisfaction and reduces incidences of job dissatisfaction. An organization should set up a structure that makes employees feel satisfied with their jobs, so that a job is not a task. Frederick Winslow insists on scientific management. His theory puts forth the idea that management of an organization, which largely depends on the structure, can be scientific. This insinuates that it can be put down to an exact science, where the tried and tested ways after years of observation are sure and true to succeed. The four step process is-develop a science for each element of the individuals work, heartily cooperate with workers so as to ensure all work is done and done properly with no grudges or ill feelings, divide work equally between management and workers instead of the old methods where workers would labor while the management did much lesser work and that management should take the work that it's better suited than the workers in order to have a balanced work environment. A good structure should incorporate some if not all of these in order to reach goals, make workers happy and the management satisfied with the output. All these management theories lead to different organizational structures depending on what works best for the organization. Though some theories put forward have been disputed or declared obsolete, this has not meant that some proposed points are not accommodated and incorporated in the making of organizational structures in today's business world. Some of these include matrix method, flat, centralized or decentralized structure, tall [traditional] structure] and many more (Learning Management2.com 2008). Small to medium sized organizations mostly have the functional and tall structure. This is where there is a clear distinction of roles among the employees e.g. a marketing manager and there is a hierarchy system of management. However, some organizations structures differ and this may be the secret to their success. Organizational structures are also largely influenced by environmental and competition forces surrounding them (Klein 1990). Innocent Juices is a U.K based company with outlets in different European countries and has 220 employees. It is a healthy foods company, dealing in providing smoothies and juices that are 100% natural and chemical free, therefore giving rise to the name Innocent, insinuating purity and freedom from contamination. It is a huge success and has received recognition for excellence in quality product delivery (Britton 2006). it has a sure way of showing how unconventional methods of organizational structure and end of bureaucracy can actually lead to successes. The Company started as a small organization to provide healthy smoothies when some friends recognized a gap in the market. They tried a successful trial and error experiment to see how potential customers would react to their product and got an overwhelmingly positive result. This boosted the morale of these friends and they promptly quit their jobs to set up Innocent Juices and propelled it to the heights it has reached now (Innocent Juices 2008). At the time of establishment, the organization had the flat organizational structure. This is a structure where there are relatively few layers or just one layer of management. The span of control is wide and chain of command is short. Most workers are usually free to make their own decisions and most of the responsibility falls on their shoulders. The workers feel free, innovation is encouraged and self-esteem is high. The organization mainly runs as a family, with subordinates not held in fear or awe by their superiors. This system is mainly found in small organizations and has several advantages. Greater communication between management and workers, better team spirit, less bureaucracy and easier decision-making are some of these advantages. Going by the information on their website, Innocent Juices company comes across as liberal, easy going and uninhibited (McKinsey News 2007). The warmth that oozes across the web pages, the easy going language that puts one at ease and the friendliness exhibited clearly illustrate that the bureaucratic hurdles frequently experienced in other organizations have been dealt away with. The fact that the enterprise was set up by friends is a strong contributing factor, clearly illustrating that the culture established influences the type of structure found in a given organization. This structure seemed to work well as there was common trust among the parties, workers and subordinates, and the advantages associated with the flat organizational structure started flowing in (Cohen 1990). The management was largely centralized, being among the few friends. The communication between the workers and management was and still is great; they refer to themselves as a 'family'. The team spirit is high and decision-making was easier due to less bureaucracy. However, this system has some disadvantages. It mainly works in small organizations where the employees know each other on first name basis, there are no branches and there is no wide range of products to be dealt with, mainly being one item or a few in the same production line. This structure also means that workers may have more than one boss. It also limits expansion and the organization is therefore confined to partnerships, cooperatives, and private limited companies. It would prove difficult if not impossible to have a large organization with the workers mainly governing themselves, as the efforts will not be blended together and it would be hard to ascertain which employee is performing under par or is not doing the best. The functions of different employees may also be blurred, some jobs may merge into one another and an employee may find him/herself in more than one task in the organization, which may lead to confusion, lack of specialization thereby limiting innovation. The company was growing by leaps and bounds thanks to their quality products and a generally happy staff and the organization has been ranked the best work place in the U.K. This has therefore meant that they had to device strategies on expansion and ways and means to achieve a competitive edge. Earlier, it's likely that the roles weren't specialized and that most members just did what deemed fit. It's also likely that most of these members did more than one jobs and it is common among employees in organizations in this structure form. But with the increased demand on products and expansion plans, the roles had to be laid out and the structure of the company had to change to accommodate expansion, an increased number of staff and higher demand for products. This is where the company had to incorporate the functional structure type, which would aide in defining roles, set out instructions and generally ensure a smoother way of doing things. The functional type of organizational structure is where people are grouped according to their functions and the roles played in the organization. The Innocent team currently consists of several teams, actually can be referred to as departments, which deal with different situations in the company. The marketing team, the commercial team, the product development team to continually find innovative and inventive ways to help combat competition, the operations team, the people and environment team which is vital amidst the rising global environmental awareness. Other departments include the technical department and the team international. With these changes taking place, the number of workers was sure to increase and so they had to be organized properly so that order could be set in the workplace and things and processes could flow smoothly. These departments are set up mostly according to the needs and the forces that the organization seems to face daily. There are forces such as competition. Others are environmental forces such as space and need for expansion which has led to the company setting up departments such as team international, operations and also the need to relocate and find bigger premises. The rising awareness among people on global warming, the fact that environmental conservation has become a most fashionable mantra has made it necessary to set up units such as People and Environment to deal with these issues (Scott 1991). Competition forces have led to the company scratching its head to come up with new and inventive ways to ward off competition. The company has introduced Innocent kids, this being a branch of the organization that deals with children, aiming to promote health and positive consumption among the young generation (Herbert 2006). The structure of the company has had to change to accommodate new products, and such leads to the introduction of commercial team, the marketing team and other departments that deal with the launch of a new product. The playfulness of the company's website appeals to kids while not being offensive to adults. This added sense of adventure and lack of inhibition relieves the tension associated with highly successful companies, which kids as well as adults can readily identify. The company has had to change by setting up regional departments, product line departments, and work teams for the company's success to realize in areas they had previously not been ventured in. From the above it is safe to say that the organizations have to strive and keep reinventing methods and ways to cope with the changes that affect them. The business environment is constantly changing and the strongest survive, so companies have to adjust their organizational structures to suit these changes (Schmoke 1989). 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