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Factors Affecting the Choice of Organizational Structure

In the business world, there are various organizational structures that a firm can choose from. The different organizational models suit different organizations, and therefore, a business should choose a model of organization that will suit its operations and ensures that it can accomplish its objectives and goals. There are various factors that should be considered before settling on the model of organization to be adopted. There are two common models of organization which are the mechanistic and organic model of organization. Mechanistic organization refers to a bureaucratic and hierarchical structure of the organization that is associated with the formalization of practices, centralization of authority and power and specialization of functions (Lunenburg, 2012, p. 5). Organismic organization on the hand can be defined as an informal organization structure that is associated with flat or horizontal hierarchy, decentralization of authority and low specialization and formalization of practices (Wilden, et al., 2013, p. 80). This paper is written to compare and contrast mechanistic and organic organization.

There are several factors that affect the organization’s choice of the organization structure:

Large organizations have a different organizational structure to that of small organizations.  This is because the size of the organization affects the set of rules, policies, procedures, and practices used in the organization (Vaccaro, et al.2012, p.34). The size of the organization also affects the type of tasks to be performed in the organization, and that is the reason business entities have different organization structures

Business environment also determines the choice of the organization structure to be adopted by the organization. Where the environment is dynamic and keeps on changing, the business is likely to adopt an organic organization structure so that it can respond to changes as quickly as possible to enable the business to perform better (Tran, Q. and Tian, Y., 2013, p.229). Where the business environment is stable, the business is likely to adopt mechanistic organizational structure so that the managers can have more control over the business operations and avoid loss of control.

Age of the organization also plays a critical role in determining the organizational structure to be used. During the early stages of the firm, the owner controls all the operations, and the business has few employees, minimal rules and regulations and the business are very informal. This requires an organizational structure that will suit it (Damanpour, and Aravind, 2012, p.2012). At the middle stage of the business operation, the business grows and employs more employees. In this stage, there is the division of labor and rules and regulations have to be established to avoid conflicts in the organization. The decisions are made by the owner with minimal consultation from the employees. During the maturity stage, the business has grown, and it has many employees. The organization formulates set of rules to be used in the organization. The organization has a division of labor, and the owner has to decentralize the decision, making process (Damanpour, and Aravind, 2012, p.2012). The owner also delegates some duties to the employees and the business is now run in a formal way. This also affects the choice of organizational structure which will be different from the one adopted when the company was young.

Size of the Organization

Mechanistic and organismic organizational structures can be compared and contrasted in various ways as discussed in the below paragraphs:

In organizations adopting the mechanistic organizational structure, decision making is highly centralized. The top management makes decisions on behalf of the organization and the authority to control tasks is not delegated. This implies that the input of the employees does not count during the decision making process (Osipova, and Eriksson, 2013, p.395). In organismic organizational structure, the decision making is decentralized, and this implies that the employees participate in the decision-making process. The control over tasks is delegated to the employees. The top management consults before making decisions.

In organizations which have adopted mechanistic organizational structures, processes and practices in the organization are highly formalized. The employees are supposed to follow the set rules and regulations failure to which there may be punishment. Deviation from the set rules is not allowed. The structure also has a well-established chain of command which helps the organization to implement the set policies (Claver-Cortés, et al.2012, p.997). There is also a well-established communication channels that stipulate the delegation of powers and authority in the organization. Organic organizational structure, there is no established formal practices that guide the operations of the organization. The tasks in the organization are not performed by following a given set of rules or regulations. There is no established chain of command that stipulate the delegation of powers and responsibilities. This enables the organization to adapt quickly to changes because it has no set rules that should be followed when addressing the change,

In organizations using mechanistic organizational structure, employees work individually on the given task. The employee performs the duties which have been assigned to him individually because the structure does not allow group work. The employees also specialize in one task which they perform repeatedly (Osipova, and Eriksson, 2013, p.395). The employees have no chance of learning how to perform other tasks because they perform one task individually. This causes boredom to the employees.  In organismic organization structure, the employee work as a team and they are not confined to specialize on one task. The employees perform different tasks in the organization, and they work as a team. The employees have a chance to learn on how to perform different tasks and also learn from their colleagues, and this helps to avoid boredom.

In mechanistic organization structure, the hierarchy of authority is well established as there is a clear chain of command that should be followed during the communication process. The organization embraces upward chain of command with the top management being at the top and employees at the bottom. The lower staff are under the control of the higher employee. This chain is used to delegate duties to the relevant employees (Huang, et al.2010, p.521). In organismic structure, the hierarchy of authority is not well defined because the firm uses horizontal structure. There is no well-established chain of command because all the departments are equally important in the organization. People work together, and the notion that the people in lower positions are less knowledgeable does not apply to this structure.

Business Environment

In mechanistic structure, most of the communication in the organization is written. This is because communication is formal and has to be done according to the set rules and regulations governing communication in the firm. There is minimal informal communication in the organization because people work individually and there is minimal interaction between employees as each employee performs one task (Damanpour, and Aravind, 2012, p.2012). The flow of information has to follow the established channels because of the much formalization of the business activities. In organismic organization structures, communication in the organization is verbal. This is because employees in the organization work together in teams and this requires a lot of informal communication. There is not established channels of communication and there is a free flow of information as employees interact while performing different roles in the organization.

Mechanistic structure of organization causes organizations to respond to rapid change slowly. Much formalization in the organization makes shifting very difficult because the business has to follow the plan established to effect change (Bock, et al.2012, p.2012). This kind of organization is not suitable in a business environment which is dynamic, and the behavior of the customers keep on changing. This is because the business has to implement new policies and practices that suit the business in the new business environment. Organic organization structure responds rapidly to rapid change because the practices of the organization are not formalized.

Organic organization structure encourages collegial atmosphere because the employees interact with each other to solve different problems in the organization. The employees also feel valued because they participate in the decision-making process and their suggestions are valued (Harinarain, et al.2013, p.29). Performing different tasks also ensures that the employees are not bored and this helps to create a happy workplace that motivates the employees which makes them perform their duties effectively and lead to the achievement of the organization goals. Mechanistic organization structure does not create a happy workplace because the employees do not interact a lot when performing their roles, the employees also perform the same task repeatedly, and this increases boredom in the organization. The employees have little participation in the decision-making process, and this leads to a dull working environment (Harinarain, et al.2013, p.29). The employees receive instructions from the top management always, and they have to follow the instructions when performing their duties. This denies them a chance to perform their roles creatively, and this can affect the performance of the organization.

Conclusion

In conclusion, before choosing the organization structure to be adopted in the firm, the business should look at the factors which affect the choice of organization structure which includes the size of the firm, the age of the business and the business environment. Considering these facts will enable the organization that suits its operations. The organization structure plays a critical role in the success of the business because it affects the communication process in the organization. In the current competitive business environment, the adoption of excellent communication strategies is the most recommended in order for a business to thrive. It also controls the process of making decisions in the organization and also motivates or demotivates the employees. From the above findings, the business should choose organization structure carefully for this determines its success, competitiveness, and sustainability in the current business environment.

Bock, A.J., Opsahl, T., George, G. and Gann, D.M., 2012. The effects of culture and structure on strategic flexibility during business model innovation. Journal of Management Studies, 49(2), pp.279-305.

Claver-Cortés, E., Pertusa-Ortega, E.M. and Molina-Azorín, J.F., 2012. Characteristics of organizational structure relating to hybrid competitive strategy: Implications for performance. Journal of Business Research, 65(7), pp.993-1002.

Damanpour, F. and Aravind, D., 2012. Managerial innovation: Conceptions, processes, and antecedents. Management and Organization Review, 8(2), pp.423-454.

Harinarain, N., Bornman, C.L. and Botha, M., 2013. Organisational culture of the South African construction industry. Acta Structilia, 20(1), pp.22-43.

Huang, X., Kristal, M.M. and Schroeder, R.G., 2010. The impact of organizational structure on mass customization capability: a contingency view. Production and Operations Management, 19(5), pp.515-530.

Lunenburg, F.C., 2012. Organizational structure: Mintzberg’s framework. International journal of scholarly, academic, intellectual diversity, 14(1), pp.1-8.

Osipova, E. and Eriksson, P.E., 2013. Balancing control and flexibility in joint risk management: Lessons learned from two construction projects. International Journal of Project Management, 31(3), pp.391-399.

Tran, Q. and Tian, Y., 2013. Organizational structure: Influencing factors and impact on a firm. American Journal of Industrial and Business Management, 3(2), p.229.

Vaccaro, I.G., Jansen, J.J., Van Den Bosch, F.A. and Volberda, H.W., 2012. Management innovation and leadership: The moderating role of organizational size. Journal of Management Studies, 49(1), pp.28-51.

Wilden, R., Gudergan, S.P., Nielsen, B.B. and Lings, I., 2013. Dynamic capabilities and performance: strategy, structure and environment. Long Range Planning, 46(1), pp.72-96.
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