CSS Solved Business Administration Past Paper 2018 | Organizational Structures are designed in two major forms; traditional and boundary less organization. Discuss their different types, characteristics as well as their relative advantages and disadvantages in comparison to each other.
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Organizing is one part of management. Organizational structure and hierarchy are influencers of human resource and decision-making. Thus, the CSS examiner gives considerable importance to this topic.
Across the globe, different organizations possess different types of organizational structures. There are two main types of organizational structures: traditional and boundaryless. Each type has its own characteristics, advantages and disadvantages. Speed of decision-making, power control and employee involvement are all determined by the type the organizational structure a company adopts.
It is a system for accomplishing and connecting the activities that occur within an organization.
- Characteristics that define an organizational structure:
- Command and Control
- Span of Control
Also known as the formal structure. It has clearly defined functions, centralized power control and relationships elaborated by the top management. They possess a strict hierarchy accompanied by rules and procedures. Most large organizations adopt such a structure.
- Types of Traditional Structures:
- Functional Organizations:
The organization is divided into different functional units, each performing its tasks to accomplish organizational goals. A group of employees possessing similar skills and abilities is grouped under a functional unit. Types of functional departments are Finance, Marketing, Human Resources and Operations.
- Divisional Organizations:
Such a structure is adopted by organizations having many product lines or expanding over different regions. Grouping of workers according to process, production or geographical unit is among divisional structures.
- Matrix Organization:
It is a combination of functional and divisional structures followed mainly by multinational organizations.
- Characteristics of Traditional Structure:
In the traditional structure, there is a clear division of work. Highly specialized labour is required that performs the same task within the organization. Tasks are clearly defined and communicated to each employee.
There are clearly defined and separated departments with a group of employees working under each department.
- Authority and Responsibility:
There is clearly defined authority and responsibility. The division between line and staff management is strictly implemented. The top management possesses the authority to take decisions, while lower management has the responsibility to implement those decisions.
- Span of Control:
There is a short and hierarchical span of control. The top management has the maximum control. There are formal layers of the administrative span of control.
- Centralization & Decentralization:
Traditional organizations are predominantly centralized, with decision-making power vested in top management. Only a small number of people take decisions while the majority implement them.
The traditional structure has a very formalized culture, and behaviours are guided by rules and procedures.
- Advantages of Traditional Structure:
- In-depth training and skill development:
As there is a high degree of specialization, the employees should be highly skilled and trained to perform their tasks.
- Economies of Scale:
Another advantage of the traditional structure is economies of scale. As the employees are highly skilled and possess years of experience, it is easy to perform tasks with limited resources.
- Clear career path:
As the employees are specialized in their work and are grouped under departments or functional units, their career path is well defined.
- Disadvantages of Traditional Structure:
- Sense of Detachment:
As the power is concentrated in only a few hands, there is a sense of detachment and discontent among the line staff.
- Narrow View of Performance objectives:
In the traditional structure, performance objectives are confined only to financial benefits or production instead of promoting innovation.
- Difficulty in Performing Responsibility:
As there are too many reporting officers and a long hierarchy, it is difficult to delegate responsibility.
Also known as the informal structure. The relationship between the organization and its employees is not based on rules and procedures. It has a decentralized power control and a flat hierarchy. Businesses in technology or innovative product mostly rely on this structure.
- Types of Boundaryless Organizations:
- Team Structure:
In this type of structure,, permanent and temporary teams are used extensively. Their purpose is to solve problems, complete special projects and accomplish day-to-day tasks.
- Network Structure:
In such a structure, information technology is used to link with a network of outside suppliers and service contractors. They only possess core competency and use outsourcing to provide other components.
- Virtual Organization:
In this structure, organization consists of a small group of full-time employees. While specialists are hired temporarily to work on opportunities that arise. This structure enjoys a network of talent without unnecessary overhead costs and structural complexity.
- Characteristics of Boundary-less Organization:
- Work Specialization:
In boundaryless organization, creativity is encouraged and no specialized skills are required.
There are no functional units or departments. In fact, employees are grouped into teams temporarily to complete projects or tasks.
- Authority and Responsibility:
Team as a unit is empowered, while there is no clear hierarchy of authority. Flexibility, efficiency and impermanence are part of the culture.
- Span of Control:
Such a structure enjoys a loose span of control, where the manager is monitoring a small number of people.
In boundary-less organizations there are no rules and procedures. Every employee is empowered to participate in decision-making while there is no power delegation.
In such a structure, hierarchy is absent, and there is no distinction between line and staff management.
- Advantages of Boundary Less Organization:
- Sense of Attachment and Involvement:
Coordination and input is promoted in such organizational structures. People are allowed to make contact outside the organization to attain help in achieving tasks.
Such type of structure is the source of continuous learning as employees interact and work in teams.
- Social needs:
Boundary less organization is a source of emotional attachment and social bonding.
- Disadvantages of Boundary Less Organization:
- Lack of Authenticity:
Such organizations face continuous rumours and inaccurate information as there is no hierarchy and delegation of authority. Hence there is the likelihood of diversion from actual or critical tasks.
- Resistance of change:
Due to emotional attachment and social bonding, there is a possibility of resistance to change. Furthermore, new employees may feel alienated and difficult to adjust.
One common hurdle in boundary-less organizations is grouping and competition among staff members. As there is no hierarchy or immediate supervisor, tussle between staff is common.
Organizational Structure is a source of determining how the organization operates and what is expected of its employees. There are two types of organizational structure: traditional and boundaryless. Both have unique characteristics that specify the organizational culture. Each type has its own benefits and drawbacks; therefore, businesses need to evaluate closely before adopting any structure.
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