Many organizations today operate under one or combined organizational designs from the main four categories. The choice of a corporate design contributes significantly to the performance of a firm. The many four classes of how firms can be structured are: Functional organization, Matrix Organization, Networked Organization, and Virtual Organization. Each design has a different aspect of operation from the other. Moreover, each organizational design has merits as well as challenges. By comparing the advantages and disadvantages of a given model, one can make an informed decision on the best and most sustainable one to adopt. This paper focusses on the four main organizational designs, comparing each to the other in terms of benefits and challenges involved, and finally proposing on the best one to come up with a high-performing organizational structure.
Functional Organization
In this type of design, there is a grouping of workers according to their areas of specialization (Fairfield, 2016). A specialist manager in the same field supervises the employees, helping them to apply their skills effectively and hence contribute to the high performance of the organization. A functional organizational structure vertically places every department with roles from the head of the company all through to the employees (Fairfield, 2016).
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Matrix Organization
The matrix design enables the relationships between employees and their bosses to be of grid nature. The employees have more than one command of the operation, enabling them to report and obtain instructions from both a functional and a product manager (Browning, 2016). Companies such as Philips, Caterpillar Tractor and Hughes Aircraft have employed the matrix design in their operation (Graf, 2016).
Networked Organization
A networked organizational design consists of several organizations attached to one firm, such that the activities among the different organizations are connected with contracts and agreements (Daft, 2015). The core firm in a network organization initiates a partnership to other companies. H&M (Hennes & Mauritz) has been using the network structure to produce and distribute their products to Asian countries (Manzini, 2016).
Virtual Organization
The virtual organizational design is a recent design in which its components are coordinated through the communication network (Nemiro, 2016)). Therefore, it is a form of the networked company structure. The entertainment industry employs a sort of virtual design, involving partnerships across computing and electronic communication to deliver services. An example of such a company is the Apple computer (Den, 2016).
Challenges Facing the Organizational Designs
Although the primary forms of organization structure are in practice, they face several challenges in the environments in which they operate. For instance, communication is a core aspect of every workplace and may bring problems if not well established. Implementing a new organization structure demands the makeshift exchange of messages across different networks until the planned system is developed (Bolman, 2017). It is possible for miscommunication to take place in this type of a setting, which can lead to incomplete or even failure to implementation.
For a given firm to run well, there is need for an order of command, from the owner or top manager to the employees. A company without a proper hierarchy and seeking to come up with an organizational framework may find it hard because of confusions. Departmental managers can be easily confused with top managers since they could have taken more authoritative roles than they were initially entitled to perform. Therefore, the staff find such a work environment hard to understanding, leading to poor performance.
Furthermore, delegation of responsibilities in a new organizational design leads to time wastage as the employees take time to understand and get used to it. Furthermore, most organizational structures are expensive both during implementation and running (Bolman, 2017). Other firm structures lead to unemployment as some departments are merged with a view to minimizing costs. In so doing, some employees are laid off. Also, the virtual organization works through space, lacking a personal touch among the participants. Virtual operations sometimes attract limited or no trust at all.
The Most Reliable Organizational Design
The functional organizational structure is the most sustainable because there is specialization among the employees (Farfield, 2016). Everyone knows their task, and there is a possibility of division of labor since workers specialize in a given line of duty. Moreover, specialist managers are always at the disposal of the employees which facilitates quick communication and report of work.
Therefore, developing a good rapport with their managers and supervisors enables employees to sharpen their skills and come up with suggestions to increase productivity. Since communication is a critical aspect of a company’s performance, there is a need to improve it through functional organizational design. Workers should be in often contact with their seniors in order to ensure a free work environment whereby everyone is able to perform their duties without interference.
Conclusion
A firm’s organizational structure is essential in defining the output. Every company seeking to come up with a new regulatory framework should first lay down appropriate measures to ensure success. For example, the stockholders should ensure that no employee will be displaced or rendered unemployed through the adoption of a new organizational design. Also, new structures should provide more rather than less comfort to both the employees and their seniors.
References
Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and leadership. John Wiley & Sons.
Browning, T. R. (2016). Design structure matrix extensions and innovations: a survey and new opportunities. IEEE Transactions on Engineering Management, 63 (1), 27-52.
Daft, R. L. (2015). Organization Theory and Design, Cengage learning.
Den Hartigh, E., Ortt, J. R., Van de Kaa, G., & Stolwijk, C. C. (2016). Platform control during battles for market dominance: The case of Apple versus IBM in the early personal computer industry. Technovation, 4, 4-12.
Fairfield, K. D. (2016). Understanding functional and divisional organizational structure: A classroom exercise. Management Teaching Review, 1 (4), 242-251.
Graf, S., & Doepp, M. (2016). U.S. Patent Application No. 14/548,281.
Manzini, G. (2016). From H&M to gap for lightweight BWT merging. arXiv preprint arXiv: 1609.04618.
Nemiro, J. E. (2016). Connection in creative virtual teams. Journal of Behavioral and Applied Management, 2 (2), 814.
