Text 4. Different Types of Organizational Structures

Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today's post-industrial structures.

Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This structure is most common in smaller organizations and is best used to solve simple tasks. The structure is totally centralized. The strategic leader makes all key decisions and most communication is done by one on one conversations. It is particularly useful for new (entrepreneurial) business as it enables the founder to control growth and development.

Bureaucratic structures have a certain degree of standardization. They are better suited for more complex or larger scale organizations. They usually adopt a tall structure.

Post-Bureaucratic Organization in which decisions are based on dialogue and consensus rather than authority and command, the organization is a network rather than a hierarchy, open at the boundaries (in direct contrast to culture management); there is an emphasis on meta-decision making rules rather than decision making rules. This sort of horizontal decision making by consensus model is often used in Housing cooperatives, other Cooperatives and when running a non-profit or Community organization. It is used in order to encourage participation and help to empower people who normally experience oppression in groups.

The functional structure groups employees together based upon the functions of specific jobs within the organization.

Early organizational design divided enterprises into relatively simple parts, splitting them into defined activities such as production, marketing or personnel. Functional organizations have the advantage of being simple to understand with clear lines of command, specified tasks and responsibilities. Staff can specialize in a particular business area such as production or marketing and follow well-defined career paths. This is equally true of human resource specialists who can develop expertise in specific areas such as employee relations or reward management.

There are also major disadvantages to functional structures. People managers have to tread carefully because this form of organization is prone to interdepartmental conflict, often degenerating into 'them and us' tribal warfare. Coherence and good communication are particularly hard to achieve between virtually independent functions.

A Matrix structure (or project-based) organisation contains teams of people created from various sections of the business. These teams will be created for the purposes of a specific project and will be led by a project manager. Often the team will only exist for the duration of the project and matrix structures are usually deployed to develop new products and services.

Matrix structure groups employees by both function and product. This structure can combine the best of both separate structures. An example would be a company that produces two products, "product a" and "product b". Using the matrix structure, this company would organize functions within the company as follows: "product a" sales department, "product a" customer service department, "product a" accounting, "product b" sales department, "product b" customer service department, "product b" accounting department. Matrix structure is the most complex of the different organizational structures.

Tall Structure Organisation. In its simplest form a tall organisation has many levels of management and supervision. There is a “long chain of command” running from the top of the organisation e.g. Chief Executive down to the bottom of the organisation e.g. shop floor worker. However, tall structures rarely exceed 8 levels of management. This is firstly because the number of layers (i.e. management levels) decreases the span of control. Secondly the disadvantages of the tall structure begin to outweigh the advantages of a tall structure. var sc_project=631980; var sc_partition=5; var sc_security="c86c84eb";

Flat Structure Organisation (also known as horizontal organization). In contrast to a tall organisation, a flat organisation will have relatively few layers or just one layer of management. This means that the “chain of command” from top to bottom is short and the “span of control” is wide. The idea is that well-trained workers will be more productive when they are more directly involved in the decision making process, rather than closely supervised by many layers of management. Due to the small number of management layers, flat organisations are often small organisations.

Hierarchical Organisation. In a hierarchical organisation employees are ranked at various levels within the organisation, each level is one above the other. At each stage in the chain, one person has a number of workers directly under them, within their span of control. A tall hierarchical organisation has many levels and a flat hierarchical organisation will only have a few.

The chain of command is a typical pyramid shape. A traditional hierarchy, senior managers make up the board of directors and are responsible for establishing strategy and overall business direction, whilst middle managers have responsibility for a specific function such as finance or marketing.

A traditional hierarchical structure clearly defines each employee’s role within the organisation and defines the nature of their relationship with other employees. Hierarchical organisations are often tall with narrow spans of control, which get wider as we move down the structure. They are often centralised with the most important decisions being taken by senior management.

In the twentieth century as organisations grow bigger, hierarchical organisations were popular because they could ensure command and control of the organisation. However with the advent of globalisation and widespread use of technology, in the 1990’s tall hierarchical organisations began to downsize and reduce their workforce. Technology was able to carry out many of the functions previously carried out by humans.

 

Exercise 27. Find English equivalents.

Підприємницькі структури, вирішувати завдання, ключові рішення, один на один, більш масштабний, зразок погодженості, керувати організацією, уповноважувати, спеціалісти з трудових ресурсів, міжвідомчі конфлікти, рада директорів, загальне управління бізнесом, робоча сила.

 

Exercise 28 . Give Ukrainian equivalents.

Power structures, industrial structures, standardization of tasks, a founder, non-profit organization, duration of the project, long chain of command, senior managers, narrow spans of control, advent of globalization. 

 

Exercise 29 . Find the definition of the terms.

1. functional structure	a) is a type of organizational management in which people with similar skills are pooled for work assignments.
2. tall structure	b) here employees are ranked at various levels within the organisation, each level is one above the other.
3. flat structure	c) has many layers of management and supervision
4. hierarchical structure	d) is an organizational structure with few or no levels of intervening management between staff and managers.
5. matrix structure	i) is one type of organizational structure that uses the principle of function/role specialization

Exercise 30 . Choose the appropriate words in brackets and complete the following sentences.

(chief operating officer, cross functional teams, structure, Board, management hierarchy, geographical regions, top managers, staff, functional departments).  

1 …. is a corporate officer responsible for managing the day-to-day activities of the corporation and for operations management. 2. A matrix structure brings together people from different parts of the organization to work as … . 3. Having decided on its strategy, a business needs to organize itself into a … that best suits its objectives. 4. The business must also decide on the best way to organize its … . 5. The company is run by … with job titles such as Chief Executive Officer (CEO), Chief Operating Officer (COO), and a series of Vice-Presidents or Directors of different departments. 6. It is usual to divide an organization into … . 7. Some companies are organized according to … . 8. The … gets involved in major strategy issues. 9. A cross-functional team brings together … from different parts of the company, under the supervision of a first-line manager.

 

Exercise 31 . Comment on the following grammar forms: decision making, specified tasks, well-trained workers, for establishing strategy, accounting department, defined activities.

 

Exercise 3 2 . Answer the questions to the text.

1. What is the origin of an organizational structure? 2. What are the features of pre-bureaucratic structures? 3. What organizations are bureaucratic structures better suited for? 4. What are the decisions in post-bureaucratic organizations based on? 5. What are the peculiarities of a functional structure? 6. What is a matrix structure characterized by? 7. What is the way of management in a tall structure? 8. What is the idea of subordination in a flat structure? 9. How is a hierarchical organization structured? 

 

Exercise 3 3 . Study advantages and disadvantages of different types of structures

Tall Structure

Advantages	Disadvantages
There is a narrow span of control i.e. each manager has a small number of employees under his control. This means that employees can be closely supervised.	The freedom and responsibility of employees (subordinates) is restricted.
There is a clear management structure.	Decision making could be slowed down as approval may be needed by each of the layers of authority.
The function of each layer will be clear and distinct. There will be clear lines of responsibility and control.	Communication has to take place through many layers of management.
Clear progression and promotion ladder.	High management costs because managers are generally paid more than subordinates. Each layer will tend to pay its managers more money than the layer below it.

Flat Structure

Advantages	Disadvantages
More/Greater communication between management and workers.	Workers may have more than one manager/boss.
Better team spirit.	May limit/hinder the growth of the organisation.
Less bureaucracy and easier decision making.	Structure limited to small organisations such as partnerships, co-operatives and some private limited companies.
Fewer levels of management which includes benefits such as lower costs as managers are generally paid more than worker.	Function of each department/person could be blurred and merge into the job roles of others.

 

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