Organisational Structure
Rex Coghlan
Key Elements
Goal Directed Objectives and Purpose
Structure Intended to facilitate the
achieving objectives
Boundary Can define where it ends
By walls ? By people ?
Schein’s definition
“the planned co-ordination of the activities of a number of people for the achievement of some common, explicit purpose or goal, through division of labour as a function, and through a hierarchy of authority and responsibility”
Key Influences on Design
Obviously the circumstance of the origin of the organisation are important:
A one person company might be said to be an organisation but it’s really when there’s more than one person that we get into structure.
Early Influences
Purpose Profit Other
Sector eg Manufacture of shoes
A school
A sports club
Personalities Nature of Entrepreneur
Interpersonal dynamics
External Influences
Cultural Environment
Refer to Hofstede’s Framework
Trompenaars
The Globe Framework
And there will always be ongoing change within the local environment eg Ireland
And
External influences from peer groups
eg design of other organisations in the same country or same sector
Link to Management
Key elements Division of work
Co-ordination of activities
Direction to goals/objectives
Division of work may reflect the overall purpose or function, the nature of the product or service, the location(s) of the organisation, the resources available (eg technology).
And these in turn affect organisational design
Division of work and structure
Decision may be to reflect in structure
Functions: eg sales, finance
Products: eg ready meal/ raw food divisions
Services: eg hotels/ restaurant divisions
Areas: eg EMEA, US
Link to Personalities
Refer back to theorists and history
Scientific school said
establish “one best way to do each job”
Mintzberg
“no one right way”
What works for McDonalds or UPS may not work for Google or Facebook
Actual situation may depend on People
Management Styles
Autocratic
Assertive
Empowering
Democratic
Participative
Consensual
Whichever predominates will influence the organisation’s structure or a part of it
The gods of management
Charles Handy used 4 Greek gods to illustrate management styles and structures
Zeus strong charismatic leader
Apollo highly structured/stable; rules & regulations
Athena individual talent and performance recognised
Dionysus infrastructure exists to support individuals
People
Weber and Fayol strong believers in bureaucratical and hierarchical structures.
Weber believed that loyalty should be to the job position rather than to its holder.
And that job positions should be arranged in a hierarchy.
But
Situational factors
Bureaucratic/ hierarchical form works of armies but not for small professional firms
Structure is organic; that is appointment of a different type of leader/key mananager may be followed by appointments of different types of executives/staff
Many cultural environments becoming more communicative and consensual.
Size and Nature of Work
Structure which suits a few people in one location may not work for a large number of people in a number of locations.
Likewise significant differences in business model; ref Woodward study
Also difference between routine work (suits bureaucratic structure) and non routine
(accomodates alternatives eg temporary teams)
Same Organisation; Different Structures
A large organisation may have a hierarchical departmental structure.
But internally departments may be organised differently
eg what suits accounts may not suit R &D
Some functions may run across the hierarchy
eg Health & Safety, Risk Compliance in Banking
Pressures for Uniformity of Structure (ref Charles Handy)
Cost
Interchangeability of personnel
Control of operations
Standard product or service
Specialisation develops and protects core competencies
Centralised control
Pressures for Diversity
Regional What works in Texas may not suit Dublin or Paris
Markets May be serving markets varying in size, brand share
Products If varied may require different support systems
Intellectual Property/Expertise; standarised structure may not protect adequately
Factors to consider
Influence of IT
has facilitated alternative structures
Outsourcing
has reduced some organisational needs
but needs pro-active management
which sometimes needs added structure
Greiner’s Five stages
Creation: very loose structure
Direction: systems and specialisation needed
Delegation: decentralisation and empowerment
but also issues of control
Co-ordination: systems and reporting lines have to be upgraded
Collaboration: more use of teams and matrix structures
Some observations
No ideal structure
Structure should be organic; ie capable of and actually evolving and changing
Culture and Structure are connected as are the people working in an organisation;
Structure will influence how people behave in organisations and organisations will be influenced by human behaviour
Lecture Week 6
Will discuss influence of structure on the formation and implementation of strategy.
ref article in July-August HBR
Task for week 6
Be prepared to speak for 3 minutes on a major organisation of your choice:
Suggestions: A major football/sports club
Marks & Spencer
Irish Health Service Executive (HSE)
A major political party
A large charity
Google
Include
What is the most important feature of the organisational structure ?
Has the current structure been in place for a long time ?
Is the organisation successful in its objectives ? And if it is or is not
Is this because of its structure ?
