Organization is uniform, structured and co-ordinate effort for achievement of economic/financial objectives for profit seeking firms and social for non-profit Organizations. To Satisfy Objectives, organization channel employee endeavors in unified direction and establishes means of allocating resources/responsibilities and control under arrangements referred as structure.
Role of Organizational Structure on Effectiveness and Performance
Organization is uniform, structured and co-ordinate effort for achievement of economic/financial objectives for profit seeking firms and social for non-profit Organizations. To Satisfy Objectives, organization channel employee endeavors in unified direction and establishes means of allocating resources/responsibilities and control under arrangements referred as structure. Designing structure that fits company needs is a major challenge. Each structure has its advantages and disadvantages on how it contributes to its effectiveness, and organization has to mull over the decision on what structures it follows, plus the autonomy organizations provide to its employees for purpose of decision making.
Definition of Organizational Structure
Buchanan and Huczynski (2004) define structure as:
"A formal system of task and reporting relationships that controls, co-ordinates and motivates employees so that they work together to achieve Organizational goals"
Thus structure is synonymous to a rope that employees hold and binds all employees towards unified direction and aids the identification of Who is Who and What is What of organization. Structure serves as basis for orchestrating organizational activities. Organizations shall understand importance of structure in carrying out business operations. Organization can choose from variety of structure like, functional, divisional, project teams, holding companies and matrix structure. Failure to choose an effective structure has it consequences on organization as it will not only affect health of the organization it will also affect employees loyalty, motivation at work and job satisfaction, thus organization when deciding for designing structure needs to take care of all aspects that relates to people and working of organization.
Mullins (2005) emphasizes that structure affects both productivity and economic efficiency and also morale and job satisfaction. Important notion stemming from Mullins assertion is that good structure will not only have tangible effects i-e financial but in-tangible affects like motivation thus impacting organizations' operational effectiveness as employees carry out operations/tasks of organization.
Role of Organizational Structure in Strategy Implementation
Bloisi (2007) highlights importance of structure as a mean of getting people work towards common goals thus acting as facilitator in pursuit of organizational goals. Looking simple but organization will have to make sure that employees identify with organizational thoughts and willingly forgo personal interests. Thus putting greater burden while designing structure which accommodates employees and harnesses an environment where staff takes organizational goals as their own and share believe of being valued through their work, hence good structure should provide right blend of command and control plus employee independence without feeling of resentment that hinders organization pursuit of its mission.
Superior structure promotes cultural values; cultivate integration and coordination as it seeks to strengthen relationship of individuals and tasks. Jones (2007) notes that from this relationship emerge norms and rules contributing to improved communications and common language that improves team performance. Contrary to Jones, Turner (2006) points to structure as primary reason why organization struggle with cultural change as these structure often box people in old styled formations which are not aligned to new business philosophies.
- Buchanan, D., Huczynski, A., (2004). Organizational Behaviour. An Introductory Text. 5th Edition. Essex: Prentice Hall.
- Bloisi, W., (2007). Management and Organisational Behaviour. 2nd European Edition. London: McGraw-hill Companies.
- Jones, R, G., (2007). Organisational Theory, Design, and Change. 5th Edition. New Jersey: Pearson Prentice Hall.
- Mullins, J, L., (2005). Management and Organisational Behaviour. 7th Edition. Essex: Prentice Hall.
- Turner, P., (2006).Why HR should be running the business. Personnel Today.