Organizational Structure and Culture

A combination of various variables is necessary to influence the organization’s success. Organizational structure and culture are important variables that impact performance and determine the daily business activities of any institution. The organization culture refers to the values and behaviors that contribute to the unique social and psychological environment of a given institution, while organization structure is the categorical hierarchy showing individual roles, duties, and obligations indicating the way in which responsibilities are assigned and controlled by different levels of organizational management. These two indicators are closely linked to each other, because while the structure imposes limits on the methods to solve the problems, the culture determines how people respond to the challenges in the workplace environment (Lombardo, 2015). Organizations succeeding in business have a positive history of a well-coordinated culture and structure that brings competitive advantage.

Effects of Organizational Culture

The culture of an organization regards some key components compared to other institutions because of a company’s uniqueness and priority values. According to Alvesson (2012), the shared assumptions and values define the characteristics of the firm’s environment. For instance, companies that promote innovation encourage their employees to take risks while performing their duties. It is different from the companies that give little value to innovation, since employees there have to do the same things in the similar way throughout the year. The later norm disregards improvement in performance; as a consequence, there are no remarkable results due to the routine work. Such a culture affects the employees by limiting the opportunities to showcase their abilities. Apart from the risk orientation, organizations that emphasize on the details by determining the accuracy levels of employees in their work in order to have a greater competitive advantage over the others. Cultures with high precision orientation outplay the others; and therefore, dictate the type of employees they require.

Another factor distinguished by Alvesson (2012) is an outcome-oriented culture. Achievement orientation characteristic affects the quality provision channel that the employees use because it is insignificant. Organizations with this culture consider the results rather than the process used in achieving the goal. An example of such organization is the one that instructs its employees to do whatever is necessary to obtain the results disguising the ethical and moral principles but making the organization function. The workers in this environment are degraded into a product-generating machines without own opinions. Contrary to this culture, Lombardo (2015) states that companies that prefer the fairness orientation, place high value on their employees, since they play a significant role in the decision-making process. A culture that treats its employees with respect and dignity influences the perception of the workforce, so that they feel as important individuals in the daily organization’s transactions; hence, essential for the company to achieve the previously set goals.

Apart from particular emphasis on the organization culture, cultures promoting teamwork also encourage employees and managers in their co-worker relationships. A team working in any institution achieves incredible results due to the fact that somebody’s persistent efforts complement the other person’s individual shortcomings. In addition to this, employees strengthen each other’s work as their capabilities are always different. In such environment, members have positive relationships within the company aiming at the results, because the manager does not have managerial hardships in enforcing the functionality of the rules. A collaboration among the managers and the employees bridges the gap in role functioning. Following this relationship, group members become assertive and fuel aggressiveness in production in order to promote competitiveness.

Effects of Organizational Structure

Any company has its structure of running the daily activities. Usually, both small and large companies consider different variables for their efficient operation. Schieltz (2016) describes the essence of a formal system of communication for decision making and task completion in accordance with the company’s needs. It is the final structure that gives rise to the structural design in a company. Various structures dictate individual functioning. They include as follows: specializing in various activities, working in departments with a chain of command, line and staff relationships, and centralization and decentralization.

Work specialization refers to how individual tasks in an organization are performed after the labor is divided into individual components. The labor division can result in the allocation of individual tasks as a part of a larger project. This form of managing smaller tasks by a company increases specialization, while it also enlarges jobs offers an opportunity to test employees, and gives the workers additional responsibilities in terms of the company’s decision (Schieltz, 2016). With the help of controlling employees with the new tasks, it is possible to boost their morale and increase diversity and specialization at the same time.

Departmentalization also leads to the grouping of employees according to the roles they perform in a company. Different jobs are put in different segments. As Lombardo states (2015), different sections describe the autonomy of the company. Classifying employees regarding their roles increases individual productivity, although it may cause laxity of the workers.

Line and staff relationships describe how people are involved in the organization. The managers that are responsible for a given line discuss and get advice from staff employees in the same chain that is efficient in communication. Managers and staff provide recommendations for possible improvements that hinder development in order to channel the efforts in the right directions and pursue the company’s goals. Employees will have the perception of having the business; and will, as a result, strive for better performance and competitive advantage (Csaszar, 2012). The fears of managers that employees tend to have are decreased.

Moreover, a decentralization organization structure puts leadership in the employees’ domain as opposed to a centralized structure whose leadership is at the top of the company. A decentralized leadership system spreads decision-making responsibilities to the lower level managers and non-managerial employees (Schieltz, 2015). In contrast to the centralized organization, decision-making process has crucial importance for the company’s leadership. While employees who possess leadership feel more secure in performing daily activities governed by their proper decisions, employees in the centralized system work with the set decisions that give little room for change and other choices.

How It Works

Implications of Different Organizational Designs

Organizational designs can be divided into two broad categories. They include traditional and contemporary designs. The traditional designs include those using simple, functional, and divisional structures, while the contemporary designs use team, matrix, project, and boundary-less structures. According to Burton, Obel, and Dorthe (2015), simple structures are found in small start-up businesses defined by low departmentalization, spans of control, a centralized authority, and little formalization. Since individuals work in all parts of the firm, while the manager controls all functions, there is minimum specialization that makes it a less competitive entity (Garcia, 2005). In the functional structure, similar occupation specialties are grouped together. Grouping increases specialization as in a divisional structure there are more functional goals to be met; that happens, for example, when various managers oversee the results of certain divisions. The Walmart Company where the work is organized into various divisions serves as a good illustration of the case (Garcia, 2005).

The contemporary designs use three distinct structures. In the team structure, an organization is formed by the teams in which each works towards a given goal. The division of the company into groups makes the teams accountable for their performance. The teams are left open to free choice as they can control their decision-making process. Burton, Obel, and Dorthe (2015) state that the teams are given the power to be innovative and can work in their desired manner as long as they provide results. An example of contemporary design with a team structure is the Whole Foods Market with an average of ten self-managed teams. Others include the project structures in which employees continuously work on projects without returning to their departments to complete their projects. A project structure, for instance, has the William Demant/Holding. In the autonomous internal units, there are many decentralized business units in which each component has its product, clients, and profit goals. Asea Brown Bover global organization perfectly represents this structure (Garcia, 2005).

Preference of Specific Organizational Structures

Following the organization structures explained above, there are superior designs that are better than others in terms of the company’s operation design. Although companies vary in the designs they use, performance is the desired primary outcome. A traditional structure is the most suitable design, since it entails semi-autonomous divisions that have partial decision-making power. Besides, each division has its goals to accomplish in which the managers oversee the entire process in a group (Garcia, 2005). In this design, the manager focuses on the results due to accountability. Owing to its decentralized power, this scheme fits many organizations assuming a traditional approach as well as those organizations adopting modern transitions.

Conclusion

Organizational structures and cultures are directly linked to the organizational performance. The culture presumes that individuals in an organization have a commitment to the main principles and morals that govern it. Since an organization shares the same environment with the employees, the goals derived from the managers’ control significantly impact individuals. The structures entail the variables that include division of labor, centralization and decentralization, departmentalization, and line in management. They enhance individual specialization and empower decision making. Two major designs govern the operation of companies, namely the traditional and contemporary designs. The traditional one uses the divisional, structural, and simplified structures, while the contemporary design employs the team, project, and autonomous internal units among the others. The suitable design is a simple design that uses a divisional structure, since it supports decentralization of power through the managers focusing on the results and partial decision-making. Thus, performance is the integral component of the organizational structures and cultures.