organizational structure of an organization and how effectiveness and success are measured

organizational structure of an organization and how effectiveness and success are measured

As a system, organizational structure outlines how an organization directs its activities to achieve its goals. Responsibilities, rules, and roles are some of the activities involved in an organizational structure. Besides, the organizational structure determines the flow of information between different levels within the company. For example, while information is distributed among various levels of a company in a decentralized structure, it flows from the top down in a centralized structure. An effective organizational structure allows businesses to remain focused, as well as efficient. Traditionally, there are four types of organizational structures that include divisional, flat, functional, and matrix. However, the rise of the digital market place, team-based, and decentralized organizational structures continue disrupting the traditional models. This paper, therefore, discusses the organizational structure of an organization and how effectiveness and success are measured. Besides, it offers suggestions on how the structure can be modified to improve its efficiency and effectiveness.

Businesses depend heavily on organizational structures, especially in defining every employee’s job as well as how they fit within the overall system. Ahmady, Mehrpour, and Nikooravesh (2016) note that organizational structure lays a foundation for the firm to meet its objectives. They further argue that organizational structure provides a visual representation of best a company can move forward and how it can be shaped to achieve its goals. Commonly illustrated in charts or diagrams like pyramids, organizational structures consist of most powerful members sitting at the top and the least member at the bottom. While organizational structure enhances the performance of a company, informal or lack of a structure proves difficult for the respective companies.

Putting a structure in place helps in improving efficiency as well as provides clarity for every member at each level. As such, each department becomes more productive because they focus on time and energy. Traditionally, there are four types of organizational structures that include divisional, flat, functional, and matrix (Kumar, 2018). The divisional structure is based on products. The firm groups workers based on the projects or products that meet particular customers’ needs. For instance, a bakery firm may structure its employees based on clientele, such as the wholesale department and wedding department. Notably, in this structure, the division of labor ensures employees achieve a higher output as well as greater efficiency. Flat organizational structure disrupts the top-down management system, a traditional version, in most companies (Kumar, 2018). The structure decentralizes management such that employees become their bosses. With so doing, employees ‘communication improves, and red tape and bureaucracy are eliminated.

Moreover, the functional organization structure groups workers with similar tasks together based on specialty. In this system, accountants are placed in the department of finance and so on for senior management, marketing operations, and human resources department. According to Kumar (2018), the ability to group members and make quick decision give this structure an edge over the other methods. Besides, the structure enhances more natural communication between workers and allows them to learn from one another. Matrix structure, on the other hand, combines divisional and functional models. This makes it the most complex method. Upon grouping workers into functional departments of specialty, matrix structure separates them into divisional products and projects. The structure gives the members more autonomy as well as more responsibilities for their work. Some of the advantages of this structure are fostering greater creativity and innovation, increasing the team’s productivity, and allowing managers to solve problems of decision making through interactions. Kumar points out that the method is more appropriate for large firms with adequate resources as it takes a lot of effort and planning.

Organizational success and effectiveness can be defined as how an association is able to meet goals. This means the firm is able to produce desired products without waste. For instance, if an organization operates efficiently, its production will have minimum wastage. One of the primary measures of organizational success and effectiveness for a firm is how well its target profitability compares its net profitability. Additional criteria include the results and data on customer satisfaction. Notably, Mesbah, Babaei, and Shabanali (2017) argue that a highly effective and successful organization exhibits strengths across five major areas that include work process and systems, leadership, people, culture, and decision making and structure.

Modifying an Organizational Structure

Organizational reflects the bigger picture of a business’s performance across numerous ranges of criteria. Internal structure, financial performance, adherence to core values, and long-term planning are some of the most critical components in assessing and modifying organizational structure. Some of the methods to modify an organization structure include giving ownership, thinking lateral, expanding borders, and building trust. Buying ownership would occur when an organization buys into system-wide. This prevents the structure from being self-serving and enhances empowering. For instance, most people prefer ownership, as well as a sense of belonging. Thinking lateral enables workers to control their work tasks. In contrast, an organizational structure with a top-down system denies the lowest level of the ability to make the decision. Deciding the front-lines gives employees autonomy and empowers them. Expanding borders changes an organization a containment document to a blueprint of boundaries to succeed and grow. Expanding borders frees people to do what they can do best. Building trust, on the other hand, supports organizational goals by creating a relationship based on commitment and trust. The structure enhances as well as impedes factors, including consistency, concern for employees’ welfare, open communication, and accountability.

Technology continues impacting how organizations are structured as well as how workflows. According to Cascio and Montealegre (2016), introductions, as well as the popularity of computers, have made it easier for employees to work as groups. The design, efficiency, and effectiveness of an organization have been affected by technology as workers no longer need to work in the same building or room to be efficient. Technology has created positions within firms as well as eliminating others. For example, filling electronically has increased efficiency as well as reduced the number of file clerks needed in firms. Besides, technological advancement has changed job functions in the workplace and the landscape of the company’s structure.

Contingency decision-making framework claims that an organization lacks the best way to organize, lead, and make a decision within a company. As an alternative, the contingent is the optimal course of action upon the external and internal situation. A contingency decision-making framework can be applied to implement effective policy in an uncertain environment. The framework would assume that there no best plans for implementing work but how decision making fits context and content factors (Boehe, 2016). Academics and historians observed that organizations have life cycles, like living organisms. As such, they are born, grow and develop, reach maturity and decline, die, in that order. At any stage, organizations are affected by internal and external factors (Mouzelis, 2017). Therefore, the organizational life cycle is significant due to its prescription and its premise. The organization structure can be classified in the growth and development stage of the life cycle. Incentivizing employees, embracing telecommuting, effective communication, being focused, keeping goals clear, and developing and training employees are some of the recommended changes.