Essay on Organizational Structures

Introduction

The existence of various internal and external factors shape organizations in the corporate world. These factors determine the strengths and weaknesses of an organization. The organization’s success is also based on strategies used to develop and sustain a good relationship among organizational stakeholders. When starting a company, choosing a relevant structure that suits the organization is the best idea, although these structures present some challenges. This paper explores various concepts, theories, and frameworks, which form part of organizational structures.

Factors Determining Stability and Uncertainty in an Organization

Organizational success or failures are based on various factors that determine stability and uncertainty in an organizational setting. Factors include socio-cultural differences, organization legal frameworks, technological aspects, political environment, shareholders, and economic base influence organization stability and uncertainty. Madinda (2014) classified four environmental forces: competitive environment, internal environment, external environment, and general environment, as forces that influence the organizational environment. Below is descriptions of these forces.

Technological Factor

Technology is an emerging trend in the organizational setting and the entire corporate world. Technology involved processes in which various kinds of work in an organization are conducted. It comprises machines, devices, operating systems, hardware, or software. Technology improves access and provision of organizational services to benefit customers, employees, and business associates. Technology enhances the organization’s stability by producing high-quality products and services, allowing the organization to remain competitive in the market. In contrast, technology leads to uncertainty, especially to administrators, when deciding on technological choices due to dynamic and ever-changing technology (Madinda, 2014).

Legal Factor

Madinda (2014) explores legal factors by demonstrating the significance of employment laws that regulate employee’s lives at the organization. These laws safeguard employees from exploitation, including financial, unfair dismissal, discrimination, safety environment, and unbiased decision. These laws protect the welfare of employees, thus increasing their productivity in the workplace. However, these laws present uncertainties to the organization since they are not fixed. The laws subject to amendments over and again based on the employee’s well-being. Besides, these laws are characterized by concerns like inequalities in employment relationship between employers and employees.

Socio-Cultural Factor

Social factors, including leadership approaches and attitudes towards work, are attributed as leading factors to environmental uncertainty. Also, the issues of gender sensitivity and equality pose a challenge to policymakers and administrators. In the workplace, there is a challenge in maintaining an optimum balance between men and women in a leadership position (Madinda, 2014).

Political Factor

The introduction of political systems and reforms has significantly influenced the organizational environment. For example, the introduction of deregulation policies and privatization has negatively undermined various organizations. For example, privatization has given the private sector more freedom to venture into productions initially controlled by the government. As a result, this has motivated investors to impose a high cost of products and services, thus undermining some organizations’ operations and existence, leading to uncertainties (Madinda, 2014).

Comparisons between Open and Closed Systems

As open or closed, the classification of systems in organization is based on systems capacity to interrelate with the environment. An open system can describe as a system that interrelates with its environment and exchanges resources and information with the environment. An open system can be ascribed a ‘self-organizing,’ since the system changes the organization according to changing situations. In contrast, a closed system is one that does not correlate with its environment (Allen & Sawhney, 2015).

From the humanistic management perspective, an open system depicts workers as a team of work organizations that contribute to external influences through values and behaviors, which positively reinforce internal organizational functioning. At the heart of this system, an organization forms part of the external environment. The models of open systems are entrenched on human relations theory, whose characteristics differentiate the open system models from models of closed systems, such as mutual respect, human dignity, motivation, and individual difference. In contrast, the closed system models assume that the external environment, including technological advancement, legal decisions, and demographic features, does not affect the organization’s functioning. As such, models of close systems do not rely on the external environment to solve managerial issues or provide any other explanations. The strategies of central management are believed to be key to solving any issue. In open systems, the external environment contributes significantly to solving organizations’ issues (Allen & Sawhney, 2015).

Additionally, unlike closed systems, open systems are very difficult to understand because of complexities and dynamic interrelationships from external factors. Moreover, employees in an open system are driven by the desire to achieve more for the organization. In case of any issue, every employee expresses commitment to the solution to the issue. However, employees in a closed system do not participate actively in development and providing a solution to problems. This model states that organizational problems shall be addressed only by the management; hence employees have no role. Lastly, a closed system is associated with Max Weber’s bureaucratic model. This model emphasized that highly rational bureaucracy is important in attaining the objectives of the society. In a closed system, bureaucracy gives departments and those in authority to developed mentality that departments and management are more important than the organization. In contrast, open system theorists have a different perception of organizational structure and its role in society. To them, models of open systems perceive organization roles in society to be interrelating and interlocking (Allen & Sawhney, 2015).

Strategies for Enhancing Inter-Organizational Relationships

Building and maintaining a good relationship are at the heart of every organization. Strong inter-organizational relationships among employers, employees, and other stakeholders is key to attaining or organizational goals. The strength of an organization is anchored on the power of connections among organizational stakeholders. Below are ways of building and sustaining the inter-organizational relationship.

A good relationship is based on understanding and learning about other people’s cultures. Knowing one another could lead to increase concern and caring for each other. This will minimize cases of oppression or discrimination in the workplace. A strong relationship is built when employees act boldly on behalf of one another. Besides, establishing collaboration enhance good relations. Collaboration fosters good relations in which individuals communicate effectively and share their thoughts and emotions without any concerns or fear. Likewise, collaboration allows workers to make more informed and profitable decisions. Also, establishing trust among workers is key to creating a healthy setting where relationship-building can be nurtured. Trust builds transparency by enabling employees to understand organizations’ strategies, goals, expectations, and paths for individual development (University of Kansas, 2018).

These relationships can be sustained through various approaches. For example, paying attention to another and helping each other in accomplishing the organizational task. Also, communicating openly encourages good relations by avoiding misunderstandings that could build tensions among workers. Also, scheduling regular meetings sessions brings together workers to share their ideas, perspectives, and suggestions to improve operations within the organization. Regular meetings allows organization stakeholders to read from the same script and provide a win-win relationship among them. Lastly, loyalty is an important value that sustains a healthy relationship. Regardless of the disagreement, with loyalty, workers would respect each other’s opinions (University of Kansas, 2018).

Implications of Organizational Structures

The four basic organizational structures include functional, divisional, matrix, and flatarchy structures. Each organizational structure has different advantages and disadvantages, as discuss below;

Functional

This structure is based on an organization being subdivided into smaller units with certain roles and responsibilities. For instance, an organization may have a unit working in finance, another in information technology, and another in public relations. Each unit has a manager or supervisor who reports to an executive. One of the advantages of a functional structure is that employees are clustered according to their skills and experience, thus allowing them to concentrate and contribute their competencies. Also, workers are dedicated and committed to a single role. However, one of the challenges presented by this structure is the lack of inter-departmental communication, whereby decision-making only occurs in the managerial position (Point Park University, 2019).

Divisional

Many larger corporate institutions use this structure. The divisional structure offers more autonomy to employees within the organization. Also, every unit functions by controlling its financers and resources, thus providing more flexibility to the organization. Under this structure, sub-division can be established geographically, with many units in various parts of the world. This structure is disadvantageous on issues to do with high tax implication and accounting practices.

Matrix

Matrix structure comprises the functional structure blending with the projected structure. Employees can report to more than one boss, including project managers and department managers. Also, this structure has a lot of flexibility and well-adjusted to decision-making. Employees can also share their expertise across various divisions, leading to the widening of their professional development. However, reporting to various managers lead to confusion. Failure to establish clear functions causes employees to get confused about their duties (Point Park University, 2019).

Flatarchy

Flatarchy structure works well with startups or small organizations. This structure provide foundation for more decision making process since there is no bureaucracies or hierarchies involved. Also, this structure encourages innovation since employees are constantly motivated to suggest ideas. Just like other structures, flatarchy could be confusing and inconvenient, especially when everybody is involved in decision-making disagree (Point Park University, 2019).

Conclusion

Various structures influence modern businesses or companies in an organization. Factors including technology, social-cultural factors, among others, determine the company’s stability and uncertainty. The company’s success is also based on developing strategies that create and maintain a good inter-organizational relationship. Based on the basics of organizational structures, each structure has benefits and limitations, as discussed in the paper.

References

Allen, J. M., & Sawhney, R. (2015). Chapter 2: Open Versus Closed Systems. SAGE Publications, Inc, 9781483350707/, 27–43. https://www.sagepub.com/sites/default/files/upm-binaries/33001_2.pdf

Madinda, A. S. (2014). THE UNCERTAINTY OF ORGANIZATIONAL ENVIRONMENT IN DEVELOPING COUNTRIES. International Journal of Emerging Trends in Science and Technology, 1(5), 774–782. https://doi.org/ISSN 2348-9480

Point Park University. (2019, January 28). 4 Types of Organizational Structures. Point Park University Online. https://online.pointpark.edu/business/types-of-organizational-structures/

The University of Kansas. (2018). Chapter 14. Core Functions in Leadership | Section 7. Building and Sustaining Relationships | Main Section | Community Tool Box. Ku.Edu. https://ctb.ku.edu/en/table-of-contents/leadership/leadership-functions/build-sustain-relationships/main