ORGANISATIONAL EFFECTIVENESS 3
TOPIC 2B: PATTERNS OF STRUCTURE & WORK ORGANISATION
Learning outcomes
On completion of this section you should be able to:
explore situational variables influencing patterns of structure;
review the nature of the contingency approach and main contingency models;
assess the changing nature of the workplace and demand for flexibility;
debate realities of structure and organisational behaviour.
Introduction
The manager needs to understand the importance and effects of structure, and the
variables that influence the most appropriate structure for a particular organisation.
Variables Influencing Organisation Structure
According to Bouchikhi and Kimberly, a feature that differentiates the 19th, 20th and 21st
century management paradigms is that due to more proactive customers and
shareholders, market driven strategies and flexible organisations have developed as a
result. The changing nature of the work environment, the increasing demands for
flexibility and concerns with the contextual factors influencing structure have drawn
attention to the contingency approach to organisation design.
The Contingency Approach
The contingency approach can be viewed as a development of the systems approach.
However, it goes a stage further in relating the environment and other variables to
specific structures of the organisation.
This approach takes the view that there is no one best, universal structure.
There are a large number of variables, or situational factors that influence organisation
design and performance.
The contingency approach emphasises the need for flexibility.
According to Vecchio, the goal of the contingency view is to explain how differences in
the contextual and structural dimensions are related.
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This approach does not seek universal principles that can be used for every situation,
but instead seeks to explain how one attribute or characteristic depends on another.
Therefore, the most appropriate structure is dependent upon the contingencies of the
situation for each individual organisation.
The situational factors account for the variations in the structure of the different
organisations.
The contingency approach can be seen as a form of “if-then” matrix relationship, ie. If
certain situational factors exist, then certain variables in organisation structure and
system of management are most appropriate.
Lynch indicates that every organisation is unique in size, products or services, people,
leadership and culture. This has implications for design of the organisation. (Refer to fig.
11.12 on pg 71)
Situational factors: type of organisation and its purpose; history; characteristics of
members (abilities, skills, experience); size, technology and environment.
Size of Organisation
Size has clear implications for organisation structure.
In the very small organisations there is little need for a formal structure.
With increasing size and the associated problems of the execution of work and
management of staff, there are likely to be more formalised relationships and greater
use of rules and standardised procedures.
In larger organisations standardisation through rules and procedures serve as an
important mechanism for co-ordination.
Size, however, is not a simple variable. It can be defined and measured in different
ways with the number of persons employed being the most common indicator.
There tends to be a problem of distinguishing the effects of size from other
organisational variables. There is also conflicting evidence on the relationship of size to
the structure and operation of the organisation.
Furthermore, there is ongoing debate about the comparative advantages of large and
small organisations. “Is bigger best or is small beautiful?”
The conclusion appears to be that complexity rather than size may be a more influential
variable.
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Read: Global Companies and Size (pg. 72)
Technology
The Woodward Study
A major study of the effects of technology on organisation structure was carried out by
Woodward in the 1950’s and has continuing relevance today. The study presents the
results of an empirical investigation of 100 manufacturing firms and the relationships
between the application of principles of organisation and business success.
The main thesis was: that industrial organisations which design their formal
organisational structures to fit the type of production technology they employ are likely
to be commercially successful.
The firms were divided into different types of production systems, from least to most
technological complexity, with three main groupings of:
unit and small batch production;
large batch and mass production; and
process production.
The research showed that firms varied considerably in their organisation structure and
that many of the variations appeared to be linked closely with differences in
manufacturing techniques.
Patterns of Organisation and Business Success
There seemed to be no direct link between principles of organisation and business
success. There was, however, a stronger relationship between organisation structure
and success within each of the three main groupings of production systems.
The study revealed that organisational patterns were found to be related more to
similarity of objectives and production techniques than to size, industry type or business
success of the firm. The organisational characteristics showing a direct relationship to
technology included span of control and levels of management.
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It was found that the number of levels of management between the board of directors
and the operators could be anything from 2 to 12, and varied with the production
system.
The more advanced the technology, the longer the length of the scalar chain.
The research indicates that one particular form of organisation was most appropriate to
each system of production and seemed to ensure success.
In unit production, for example, short and relatively broad based pyramids appeared to
ensure success while process production seemed to require taller, more narrowly based
pyramids.
Woodward concedes that technology is not the only variable that affects organisation
but is one that could be isolated more easily for study. The study does, however, draw
attention to the importance of technology, organisation and business success.
Relationship between Development, Production and Marketing
A further finding of the Woodward study was the nature of the actual cycle of
manufacturing and the relationship between the three key task functions of
development, production and marketing.
The most critical of these functions varied according to the type of production system.
Unit and Small Batch
Production based on firm orders only with marketing as the first activity.
Greater emphasis was placed on technical expertise and the quality and efficiency of
the product.
Research and development was the most critical activity.
Large Batch and Mass
Production schedules not dependent on firm orders.
Product development represented the first activity.
Production was the most critical function.
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Process
Marketing was the most critical activity.
Products were impossible or difficult to store, or storage capacity was limited.
The flow of production was directly determined, therefore, by the market situation.
Emphasis on technical knowledge was more on how products could be used than on
how they could be made.
Environment
The following studies focused on the effects of uncertainty and a changing external
environment:
Burns and Stalker - divergent systems of management practice (mechanistic and
organic structures)
Lawrence and Lorsch - the organisation of specific departments and the extent of
differentiation and integration.
The Burns and Stalker Study
Studied the effects of the external environment on the pattern of management and
economic performance.
Distinguished five different kinds of environments ranging from stable to least
predictable.
Identified two divergent systems of management practice and structure: the mechanistic
system and the organic system.
These represented the two extremes of the form that an organisation can take when
subjected to technical and commercial change.
Mechanistic System:
Is a more rigid structure that is unable to deal adequately with rapid change (more
appropriate to stable conditions).
Characteristics of this system are similar to those of bureaucracy.
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Co-operation and monitoring of performance is achieved through the chain of
hierarchical command.
Organic System:
Is a more fluid structure appropriate to changing conditions.
Appears to be required when new problems and unforseen circumstances arise
constantly and require actions outside defined roles in the hierarchical structure.
Positions are differentiated according to seniority and greater expertise.
However, location of authority is by consensus and the lead is taken by the “best
authority” (the person seen to be the most informed and capable).
Shared beliefs in the values and goals of the organisation.
Refer table 11.1, pg 75 for Characteristics of Mechanistic and Organic Organisations.
Mixed Forms of Organisation Structure
Hybrid organisations are a mix of mechanistic and organic structures. This “mix” can
lead to tension and conflict.
Certain groups may prefer a mechanistic structure and to work within established rules,
systems and procedures while other groups may prefer and perform best in an organic
structure.
A university is an example of a hybrid organization with differences in perception
between academic staff and non-teaching staff.
A hotel is an example of a hybrid organisation in the private sector. A mechanistic
structure is more appropriate for the operations of the kitchen (production element).
Departments more concerned with the service element, such as reception, may work
better with an organic structure.
The different perceptions of appropriate organisational styles and working methods
present a challenge to management.
Senior member of staff, who has the respect of both groups, must act in a bridging role
in order to eliminate conflict.
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The Lawrence and Lorsch Study
Study carried out to examine overall structure as well the way in which specific
departments were organised to meet different aspects of the firm’s external
environment. Internal structures were analysed in terms of differentiation and
integration.
Differentiation and Integration
Differentiation describes the difference in cognitive and emotional orientation among
managers in different functional departments with respect to:
the goal orientation of managers;
the time orientation of managers;
the interpersonal relations of managers to other members; and
the formality of structure.
Integration describes the quality of the state of collaboration that exists among
departments that are required to achieve unity of effort by the demands of the
environment. (It is the degree of co-ordination and co-operation between different
departments with interdependent tasks.)
The researchers’ view of integration was not the minimising of differences between
departments but the recognition that different departments could have their own
distinctive form of structure, and the use of mediating devices to co-ordinate the
different outlooks of departments.
Different Environments and Structures
Individual departments may develop different structures to cope with different demands
of the environment (different levels of uncertainty). The researchers found clear
differentiation between the following departments:
Research:
concerned with the long term;
pressures for new ideas and product innovation;
operated in a dynamic, scientific environment;
had the least bureaucratic structure.
Production:
concerned with the immediate short term;
short term problems such as quality control and meeting d-dates;
operated in a fairly stable, technical environment and had the most bureaucratic
structure.
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Sales:
was in the middle between research and production;
concerned with chasing production; moderately stable market environment.
Further research was carried out to establish what forms of organisation structure were
required for different environments.
The researchers concluded that the extent of differentiation and integration in effective
organisations will vary according to the demands of the particular environment:
the more diverse and dynamic the environment, the more the effective organisation will
be differentiated and highly integrated;
in more stable environments, less differentiation will be required but a high degree of
integration is still required. Differences in the environment will require different methods
of achieving integration.
Given the possibility that different demands of the environment are characterised by
different levels of uncertainty, it follows that individual departments may develop
different structures.
Integrating Mechanisms
In mechanistic structures, integration may be attempted through the use policies, rules
and procedures.
In organic structures, integration may be attempted through teamwork and mutual cooperation.
As the requirements for the amount integration increase, additional means may be
adopted, such as formal lateral relations, committees and project teams.
Note: the right balance of integration is important:
too high a level of integration - costs exceed benefits;
too low a level of integration - poorer quality decisions and failure to make best use of
resources.
Read: Evaluation of Contingency Approach (pg. 77)
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The Changing Face of the Workplace
Birchall makes reference to the changing world of organisations and its impact on
management.
Most of the work carried out by middle management no longer requires extensive layers
of management.
Tasks that usually took up a substantial amount of management time in hierarchical
structures are now accomplished with minimal supervision or intervention.
There is a move towards the use of projects to accomplish much of the organisation’s
work.
Increasingly, managers will find themselves managing people who spend much of their
time outside the office.
There is also a significant move towards the use of consultants.
Thus, managers will need to be familiar with electronic networks, the operation of
dispersed teams and virtual organisations.
Cloke and Goldsmith are of the belief that rather than building fixed structures with
layers of middle management, many innovative organisations function as matrixed webs
of association, networks, and fast-forming high-performance teams.
It is also suggested that there is a decline of the hierarchical, bureaucratic, autocratic
management and the expansion of collaborative self-management and organisational
democracy.
Information Technology
The impact of IT has significant effects on the structure, management and functioning of
most organisations.
IT influences the need for restructuring the organisation and results in changes to lines
of command and authority.
Computer-based information and decision-support systems influence choices in the
design of production or service activities, hierarchical levels and organisation of support
staff.
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IT may influence the centralisation/ decentralisation of decision-making and control
systems.
New technology has typically resulted in a ‘flatter’ organisational pyramid with fewer
levels of management required.
In the case of new office technology it allows the potential for staff at clerical/operator
level to carry out a wider range of functions and to check their own work.
The result is a change in the traditional supervisory function and a demand for fewer
supervisors.
Most manufacturing and industrial organisations still require the physical presence of
staff at the place of work.
For service or creative organisations, such physical presence is not always necessary.
There is the opportunity for knowledge workers to work from home or where there is
access to a computer.
Fisher indicates that as the technology for achieving remote working gets better and
cheaper, expectations for remote working will rise sharply.
Mobile working is increasingly hard to ignore and companies and individuals must
decide how available they want to be.
9 to 5 working may no longer be enough!
Some businesses will be able to get rid of fixed premises altogether.
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Outsourcing
In order to free management to concentrate on core activities, businesses are
making increasing use of outsourcing and thus have a wider range of non-core
services provided to them by specialist service providers.
One of the consequences of increased outsourcing is that the boundaries of the
organisation is becoming blurred.
Outsourcing can address cost reduction, lack of expertise or work that does not
make a full-time role but is a very radical solution to cost cutting.
When a company outsources an activity, it cannot just forget about it. The
company and its directors are still accountable for the activity, and needs to
review and monitor the outsourced work. With outsourcing, power seems to be
no longer about direct control but about the ability to coordinate the supply chain.
Demand for Flexibility
The nature of work is being redefined and this has resulted in higher pressure for
greater flexibility in patterns of work organisation and in the workforce.
The workforce is now more diverse than ever reflecting changes in society.
Significantly, there are more women employed now. Also, companies look to
retain knowledge workers as well as those with specialist skills which leads to an
ageing workforce. This represents quite a mix of people each with their own
needs.
Taking into consideration that customers expect to have goods and services
outside traditional working hours, it makes good business sense to introduce
flexible working arrangements in order to improve customer service and to
enable employees to achieve a better work/life balance.
Flexible working can help to reduce absenteeism and increase productivity,
employee commitment and loyalty.
Flexible Working Arrangements
Are a range of options designed to help employees balance work and home life.
Refer to pg. 81 for examples of flexible working practices.
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Telecommuting
Recent advances in computerisation and telecommunications have had a further
significant effect on opportunities for flexible working.
People can work from almost any geographic location: from head office, a
satellite office, a shared access telecenter; or from their home, hotel room or car.
An increasingly popular means of teleworking is telecommuting where staff work
from home with a computer network, telephone and fax. Technological
developments have made this possible and economic and social factors have
made it necessary.
Homeworking
The greatest barrier to homeworking success is that of trust, and the traditional
managerial attitude about employees having to be seen to be considered
productive.
Working from home does not appeal to everyone and it needs to be managed
well, especially for full-time home workers.
Furthermore, working from home may result in a feeling of detachment from the
work situation. Also, homeworkers may miss interaction with colleagues.
Homeworkers may battle to escape the strains of domestic life and often report a
feeling of exhaustion and increased conflict from the demands of balancing work
and family.
Read: Structure and Organisational Behaviour (pg. 82)
Date Revised March 2025 / RM
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