The Organizational Structure in an Organization - Essay Example

The organization under observance in this essay is Toyota.  Toyota uses a matrix structure which is, arguably, an amalgamation of two models; traditional design and horizontal structure. To understand the matrix structure, let us first look into the traditional model and the horizontal model. These ways, the essay will cover multiple styles of organizational structure.

The traditional model, also called functional design, is the conventional way of organizational structure. It adopts a centralized manner of task allocation and responsibility-sharing. Generally, the traditional model uses a bureaucratic style, and lines of authority are well-defined (Organizational Structure, n.d.).  When it comes to considering the customers, the traditional model fails to acknowledge customer feedback and opinions since the structure is strictly function-oriented. On the other hand, a horizontal structure has a flat layout. Also called a flat structure, functions in the horizontal structure are spread out and there is a less authoritative manner to it while giving room to a greater span of control to employees. Unlike the traditional model, a decentralized approach is employed in a flat structure, whereby, there is increased communication and teamwork. There is room for customer feedback due to the emphasis on high levels of communication. In the last two decades, companies have shown a trend towards shifting to a horizontal structure since it encourages communication and feedback. The traditional model is rather a primitive style of the organizational chart; companies in the 20th century were more bent towards the functional approach. However, towards the end of the century, the new-age style of designing the organizational chart was shifting towards being a flatter structure. Subsequently, modern organizations adopted an amalgamation of the primitive models, hence, the matrix model, which is partially centralized and partially decentralized in nature.

The illustration below shows how a matrix-structured organizational chart would look like. At Toyota, the employees find themselves in an inter-connected group of personnel who know their functions while keeping communication at an optimum level. ‘The Toyota organization structure is designed to support teamwork. Toyota followed the power of coordinated team structures’ (Toyota, 2011). The chart below, clearly, shows how the functions are linked with each other, following a top-down design along with a flat structure. One common advantage of using a matrix structure is that it allows for expertise and specialized staff to be efficiently employed, rather than undesired duplication of functions and hence, wastage of expertise.

One of the ways that influence the organizational structure is to consider the vital organizational functions. The functions include human resources, finance, marketing, sales, etc. During the design phase of the flow chart, the company must analyze the company goals and vision because that will provide the appropriate framework for the organization. The functions at Toyota include marketing, finance, operations, R & D, etc. to save time, and allow processes to be completed in a quick fashion, there needs to be fast communication along with a stringent quality control framework. The higher authority at Toyota needs to be involved in the functions while also allowing for middle managers to take ownership of their duties. The matrix approach is a flexible mix of two polar models and it certainly allows the organization to be progressive. Since today’s markets tend to be unpredictable, a successful company, like Toyota, can only function if it is versatile internally; the internal flowchart should be fluid in order to achieve success.

An important point to consider, here, is to acknowledge that the nature of a company and its products/services also influence its choice of organizational design. For a company that does not require, or cannot afford to allow, high levels of communication or employee-to-employee interactions, it is best to employ the traditional model in that company. Also, location also influences certain differences in organizational flow charts as well. Especially in third–world countries, labor-intensive companies, that manufacture primary goods, tend to utilize the traditional model in their organizational chart. This is because the lack of need of communication and feedback really makes it viable for the company owners to utilize the functional model as their structure. On the other hand, there are other ways to design a chart such as using a product-oriented design, a hybrid model, customer-based, or a marketing channel design.

Product-oriented designs are structured according to the product line of the company. For example, P & G employs a product-oriented sub-structure whereby employee groups are divided according to the product they are involved with. These ways, group-working is enhanced; however, a disadvantage is that cross-departmental communication is of bad quality especially when customer feedback comes into the picture; ‘A product structure leads to poor coordination across product lines which is a major drawback when divisions serve the same customers’ (Vanhaverbeke, W., Torremans, H., n.d.)

At the end of the day, however, it is imperative that companies assess their market and the nature of their products and services while choosing the organizational structure. The solid reasoning behind this is that every company according to its geography, target market, product, service, and span is unique, and to maximize the internal operations and reach optimum performance, the structural design should, indeed, be consistent and coherent with all these factors.