The Importance of Organizational Structure in the Modern Days - Research Paper Example

? Organizational Structure Introduction The term ‘corporate structure’ is the way different parts of an organization are related and arranged in contrasting with the building arrangement (Thecqi, 2013). It is often referred to as organizational structures. Organizational structure principally consists of activities like supervision and coordination, resource and task allocation that are directed towards the fulfilment of the organizational objectives. The structure of an organization depends upon their objectives and aims and the structure is responsible for determining the mode in which the organization will performs and operates in the market place. It is necessary for every organization to have its own structure for the purpose of ensuring effective operation. In simple words, the organizational structure is the hierarchy of the organization’s function and its people. Moreover, it also reflects the values and characters of an organization. Depending upon the values and objectives, an organization tends to adopt one of the following organizational structures. This study seeks to investigate about the type of organizational structures and the importance of organizational structure in the modern days. This study will also shed light on whether there is an appropriate institutional structure for certain sectors? For example, the question to be analysed is - in the automotive and the rapid consumption industry do we expect the structures of these institutions to be any different? In addition, the study will also investigate whether an organization's structure should change due to the shift in environmental conditions? In order to analyse the questions the study will depend on the secondary result and ultimately will draw a conclusion. Discussion Every organization needs to have a particular structure in order to operate efficiently as well as systematically in the market place. However, the structure of the organization is greatly dependent upon the maturity and nature of the organization. Therefore before getting further deep into the discussion, brief overviews of the most common organisational structures are presented below. Bureaucratic Structures An organization following bureaucratic structure maintains strict hierarchies when it comes to the management of people. The bureaucratic structure is further divided into three structures namely pre-bureaucratic structures, bureaucratic structures and post-bureaucratic structures. Organisations following pre bureaucratic structures lack standards and are usually visible in start up companies or small companies. Pre- bureaucratic structures are highly centralized and usually there is a sole decision maker. On the other hand, bureaucratic structures have a certain level of standards. This is usually practised in large organization with complex management. Organization following post-bureaucratic structures also put strict management into practise, but they are enthusiastic in adopting new methodologies and ideas as well (Huber, 2005). Functional Structure Organizations following functional structures have their organization divided into different segments as per the functions of the departments. Moreover, the manager or the supervisor of that department also comes from the same background or same filed. As a result of this, organizations embrace the ability to enhance efficiency of the entire organization by appointing and allocating specialized person in each department. For example, in a software company the entire recruitment and selection process of the software engineers are done by the existing software development teams of the organization. In this way the supervision and management of this group becomes effective. Functional structures are mostly visible in organizations with large scale operation (Maguire, 2003). Divisional Structure In this type of organisational structure, companies divide functional areas into different divisions. Each of the division is provided with their own resources in order to ensure they perform their functions and carryout activities independently. The divisions are arranged on the basis of location (geography), service or product, or any other factor that can be measured. This organisational structure is being followed by General Electrics. The company divides its functions into turbine division, microwave division etc (Dubrin, 2011). Matrix Structure The last form organizational structure is the matrix structure. In this structure, organizations place the employees on the basis of the product and functions. The matrix structure is basically a combination of both divisional structure and functional structure. Companies mainly follow this structure for the purpose of solving complex problems and departments usually functions as a team. A number of scholars argue that there is no predefined standard on the basis of which organizational structure is determined (Singh, 2007). However, the structure is often determined by the nature and size of the business. Echoing this, another set of authors put emphasis on the fact that it is necessary to have clear structure for ensuring development of the organization, but the bets structure is extremely difficult to determine. The author further reinstates that the best structure is dependent on the management of the organization and the level of their development (Manning, Kinzie, and Schuh, 2012; Aquinas, 2009). Moreover, regardless of the structure of the company, it depends upon some elements. The elements are: - Some sort of governance Rules on the basis of which an organization operates Distribution of work (Schultz, Berkowitz and Loewenstein, 2013) Therefore, from the above discussion it is evident that there is no predefined rule or standard on the basis of which an organization determines its best structure. Similarly, there are no set standards or procedure by which an industry can select the best operating structure. Hence there is no appropriate institutional structure for certain sector. In the context of an automotive industry and rapid consumption industry, similar factors are considered before selecting the most appropriate formation. However, it has been observed that most of the companies belonging to the automotive sectors consider divisional structure as the most fitting arrangement. For example, a car manufacturing company with divisional structure may segment its divisions on the basis of components. Therefore, SUVs, subcompact cars and sedans can be three different divisions. In the similar way, companies belonging to the rapid consumption industry do not have any guideline to determine the structure of organization. Such companies often involve themselves into functional structure. This is primarily because of the fact that these companies are mostly involved in industrial activities and thus functional structure offers them with better results. Despite, achieving better results by the practise of functional structure, it cannot be affirmed that functional structure is the optimum structure. Hence, it can be stated that rapid consumption industry or the automotive industry does not have any appropriate institutional structure. The present business age is time and again deemed as the age of turbulence and disarray. As a result of this organizations are also finding complexities to sustain in the market place for a longer period of time. Strategic changes within organizations are one of the ways by which companies deal with the changing business environment. However, nowadays it has been observed that companies are also considering a restructure in the operations system and embracing an entire change in the corporate structure. The rapidity of this change has been increasing at a great pace. Although earlier, the pace was slow but due to the dynamic nature of the business environment, organizations are forced to make drastic shifts in their structure of operation. A number of authors have argued that organizations should consider flexible structure in order to effectively react to the external business environment. The author also emphasizes that due to the changing nature of business process, organizational structure needs to be kept flexible so that it can be adjusted as per the requirements (Kirikova, 2005). In the similar way, some other authors have also stated that an organization should change its structure as per the nature of the external business environment (Sharma, 2006). On the contrary, if the company fails to make modifications to its operations systems, it may fail to continue operation. Conclusion The study was related with the importance of organizational structure and how it contributes to the performance of an organization. This study have also emphasized on whether there is an appropriate institutional structure for certain sectors? In addition, the study also addressed whether an organization's structure should change due to the shift to environmental conditions? The question analysed for this study is - does the automotive and the rapid consumption industry do we expect the structures of these institutions to be any different? On doing the study, it has been found that there are no predefined standards or guidelines on the basis of which an organization belong to any industry can determine its most appropriate organizational structure. However, the study revealed that majority of the companies of an industry follows a particular organization structure. This is because, they are getting their desired result, but there is no theory to back that a certain structure is the most apt one. On the other hand, the study put emphasis on the fact that organization's structure should be flexible and must change according to the external environment in order in order to operate efficiently in the market place for a longer period. Reference Aquinas, P. G., 2009. Organization Structure & Design: Applications and Challenges. New Delhi: Excel Books India. Dubrin, A. J., 2011. Essentials of Management. 9th ed. Connecticut: Cengage Learning. Huber, D. L., 2005. Study Guide for Leadership and Nursing Care Management. 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