Despite of the fact that there are certain criteria, according to which organizational structure can be identified; the process of applying a certain design for an organization is often based on the intuition of the top management. Each structure has its advantages and disadvantages, and, for this reason, they are constantly being developed and improved.
The variety of designs is very wide in order to fit each organizationâ€™s needs. Managers can choose from a simple structure to a complex one. They can choose a structure, which will be project-oriented, function-oriented, or the mixture of the two.
The following research paper is going to analyze two organizational structures, which a very widespread among the companies. Advantages and disadvantages of each structure will be analyzed.
Traditional Organizational Structure
Traditional, or bureaucratic, structure is usually used in the big and complex organizations, which are dealing with a big range of products and have large amount of different levels employees. There is little innovation in the functioning of the company, and its practices are mostly standardized. The structure is used in order to improve the efficiency of the company. According to this design, management sets the rules for the entire organization, which have to be followed by everyone employed by it. The structure serves as a tool for putting those rules into practice. It puts the management at the top and holds it away from the lower level employees. Traditional structure is mostly concentrated on the functions of the organization, the way all the activities are performed and the way an information flows within the company.
The biggest advantage of a traditional structure is that it increases the efficiency of the company by giving exact guidelines of how the organization must function. On the other hand, it completely removes the communication among employees of different levels and, therefore, can be a barrier for the information flow.
An example for an organization with a traditional structure could be a large company, which produces standardized product such as, for example, electrical batteries. There is little innovation in the functioning of this kind of business, and, therefore it demands a standardized structure, which will assign a certain activity for each employee. The company is divided into departments, and each department has its own manager, who controls the flow of tasks within his or her department. The professionals within each department hold only the knowledge, which is required for their scope of activities.
Modern or Mixed Organizational Structure
For those companies, which are not function-oriented, a different approach toward their structures is needed. The products in such companies are not standardized and demand flexibility in the way company functions. Modern structure is designed especially for these kinds of organizations. It combines project and matrix designs, which are focused on making company being able to change according to the certain project. It also can be successfully applied to the companies, which produce more than one product. Mixed structure is more complex than a traditional one; however, it allows organization to combine different organizational designs and, consequently, increase its efficiency.
Matrix structure uses separate teams of people in order to work on a certain task. This allows professionals in different areas to concentrate only on one task or product at a time.
It also has a clear separation of responsibilities within the team; however, everyone in the group has a direct communication and can easily exchange information. Project structure is focused on a certain task, which company has to perform. This structure allows forming new teams from the already existing ones. Professionals in different areas are taken from different departments and are assigned to finish a project.
An example for a modern structure would be a company producing furniture. Especially if company specialized both on household and office furniture, it has a wide range of products. A separate team of professionals is required for each set of products. In addition, new furniture designs have to be constantly developed, which requires project structure to be applied.
Each structure has its advantages and disadvantages, and the choice of choosing one of them remains one of the biggest challenges for the managers. There are many factors, which need to be considered by them before choosing a design for an organization. However, despite of the chosen structure, there always must be a clear framework, according to which company functions.
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