Organizational structure, a popular phenomenon in the dynamic business world, can be defined as the manner in which a company allocates its management responsibilities and how different activities are coordinated within the firm. The structure of an organization will always influence its success. A well-devised strategic and operational framework is more likely to enable the company to attain its objectives easily than a roughly sketched one (Zusman, 2021). Small enterprises generally start without a formal organogram but gradually add hierarchical corporate entries with departments, executives, and other subordinate minions as the business expands, thus realizing improved performance. On the contrary, the absence of such a setting in a business implicates operational inefficiencies that may eventually push it out of the market as a result of competition. A breakdown of the absence of a hierarchical model within a business edifice, its predisposing factors, possible solutions, as well as the effectiveness of these interventions, forms the basis of discussion for this paper.
High Rate of Turnover
Employee turnover, often known as staff renewal rate, is a problem in which employees quit their jobs frequently and in large numbers. To compensate, a company must hire new workers on a regular basis to fill such positions. This might deprive the corporation of its resources and cause workflow interruptions (Xianghua, 2020). High turnover rates may be attributed to employees are being disgruntled by management and their leaders, thus making them unsatisfied with their work. For example, when workers are underpaid and would like to be paid more for their efforts, they are more likely to quit. Reaching out to workers and receiving opinions from them may help firms solve this problem. Additionally, making meaningful efforts to address team members’ complaints can boost staff productivity and retention, as reinforced in the section below.
Departmental Discord
Generally, employees report to two distinct heads in a decentralized organization structure: a functional manager and a department manager. For example, a human resources employee specializes in recruiting, employing, and training employees and thus reports to the human resource manager as well as the department head. This strategy can be applied to a majority of the trained personnel in the company. However, time frames and budgets may create rivalry across departments, leading to conflicts of interest between employees in lower divisions and their seniors, making it difficult for management to decide on the right path to take. Effective inter-departmental cooperation and coordination can be used to avoid inconsistency issues among employees, as discussed in the sub-topic that follows.
Inconsistency
Inconsistency can emerge when each department in the company operates autonomously. If company policies and practices are not enforced, employee dissatisfaction and confusion may result. This is primarily caused by workers who shift between different roles, creating inefficiency issues if they act the same way they did in their previous positions (Vithayathil & Choudhary, 2022). When these transitions happen in different departments, customers find it difficult to identify the people in charge of specific roles, thus sabotaging interpersonal relationships between staff and clients. As part of the solution, the business can re-configure customer care services so that each customer is assigned to a company representative. This helps to avoid communication bottlenecks that originate from the firm’s expansion, highlighted in the section below.
Communication Issues
Organizational systems that may have functioned earlier become inefficient as a small business grows. For instance, the use of random briefings by employers for conveying urgent information tends to become obsolete as the firm’s economies of scale expand. The lack of structure or a rigid framework might make it difficult for employees to pursue the company’s objectives because of inflexible schedules that cannot match the dynamism in the world of business. Organizational challenges caused by rapid expansion can be alleviated by establishing good communication modalities, such as print, email, and presentations to facilitate the flow of information (Schwer & Hitz, 2018) Implementing strong project management principles and the adoption of frequent employee evaluation schemes, among other solutions, can help to codify communication methods and strengthen the organizational structure respectively.
Problems Associated with a Substandard Organizational Framework
The rapid rearrangement of organizational units, departments, or activities can result in suboptimal, unbalanced management systems that do not complement the company’s objectives. Poorly planned consolidations can result in a variety of issues that adversely affect the firm’s operation in the long run. For example, when firms downsize middle levels of management without eradicating the job slot, the remaining workers are compelled to perform extra duties. This leads to structural gaps in positions, work procedures, and obligations, as well as an inefficient flow of information within the organization.
Further Reading
Employees from lower ranks who fill the vacancies left by their retrenched colleagues in higher levels of management may not have the necessary knowledge and skills to handle the expected duties. Flexible businesses can instantly access and hire new employees to meet changing business needs. However, with limited resources, most employees can only focus on their current obligations, devoting less time, effort, or motivation to working outside the scope of their existing job specifications (Winnubst, 2018). As a result, a company’s ability to compete is weakened by reduced work capacity and a slow response to consumer needs.
Evaluation of Workers
As a manager, it is possible to develop the correct jobs for the company, but hire the wrong employees for those slots. This can be corrected by revising the job selection criteria and reassigning some staff to duties other than their current ones (Marín-Idárraga & González, 2021). In addition, comparing the current employees to the new organizational chart and documented job requirements can help to identify workers who need to be transferred to new positions, retained in their current ones, retrained, or retrenched. This necessitates the need to redesign the existing organogram in order to smoothen the hiring process, as illustrated in the following segment.
Designing of a New Structure
The manager should build a new organogram based on the existing skills gaps and budget constraints. However, it is important to notify the current employees of the new framework, inform them of their revised responsibilities, and begin their training (Liu & Lv, 2021). The balance between authority and responsibility should be maintained such that senior employees are delegated to core responsibilities within the firm. Lastly, the hiring process should begin by soliciting comments from staff and business networks, as well as posting job vacancies on advertising sites in order to attract applicants who conform to the company’s requirements.
Listing of Requirements
The first step in dealing with a lacking or substandard organizational structure is to establish the problems associated with it. For example, if all managers are directly answerable to the owner and there is no institutional hierarchy, it may be essential to establish a model with levels of management. Once the problems have been identified, a list of management requirements should be created in order to address them (Jonathan, 2018). The dual-phased scope statement should comprise of a management chain listing all the current personnel and their positions. The second chart should contain positions to be attained if the business were launched in the most recent times. These two diagrams will show the current position of the firm alongside its future projected level, making it easy to plan on the company’s best strategies to incorporate for faster progress.
Effectiveness of the Proposed Solutions
Regular assessment of employees has the capability of minimizing conflicts among them. Holding other factors constant, if a worker understands their responsibilities, they will be more dedicated to their obligations. Therefore, assigning each worker what they can do best upon evaluation is a great way to ensure coworkers interact with one another in a poised manner, thus upholding the tenacity of the organization structure (Joseph & Gaba, 2020). In addition, selecting the right people to collaborate with can result in a productive team culture that leads to the timely delivery of products and services. Scheduling all new employees at the same time can cause confusion, while scheduling all seasoned staff at the same time can lead to leadership wrangles. In that regard, a routine with a balanced mix of personality types will ensure a smooth workflow, an efficiently run shift, and effective communication among staff, as discussed below.
Improved Communication
Restructuring an organizational hierarchy leads to a streamlined flow of information and ideas between different divisions and teams, although this will vary from one organization to another depending on the specific framework in place. Employees occupying lower ranks of the company will know who to turn to for particular issues once responsibilities have been delegated to them (Eva et al., 2018). If a given docket has only one manager, for example, it is easier for his subordinates to know whom to report to in case problems emerge. For example, when an employee needs clarification regarding a prospect’s design, they will approach the sales department, and the duo can exchange ideas and implement an agreed decision much faster as discussed below.
Quick Decisionaking Process and Efficient Branch Management
When the company’s varied teams are able to communicate effectively, it will have a favorable impact on overall workflow since decisions will be made more quickly. The flow of information, combined with a well-structured organizational edifice, can help to speed up the decision-making process. Concurrently, the latter can assist business owners to ensure uniform operations and compliance with the same rules for different business branches (Eva et al., 2021). An organized framework serves as a quality control template for them since they cannot always be physically present in all the branches at the same time. As a result, owners are able to realize high quality output as there are no lapses between decisions and their implementation as elaborated below.
Increased Productivity
When a business entity employs effective communication channels and upholds creative strategic management, it is able to grab new opportunities as they arise, capitalize on emerging trends, and boost employees’ morale. An employee who has one superior hardly gets conflicting directions and easily follows the required job instructions without waiting for further approval from higher ranks (Auchter et al., 2018). When employees are happy, they volunteer new ideas and stay committed to their workspace. Therefore, proper organizational structure leads to increased productivity and a firm’s growth potential. For example, when salespersons inform their seniors within the department about an anticipated supply of a machinery or company equipment to be delivered soon, the concerned department is able to make the most effective scheduling plans in advance, such as securing adequate warehousing space and budgeting for transportation costs.
Conclusion
The fundamental management tactics highlighted above can be adopted to better supervise personnel, coordinate activities, and enhance the efficiency of work flow in an organization. When they communicate more efficiently, employees are less likely to make mistakes or have to guess at the roles they are obliged to do. The negligibility of production issues, defective outputs, delayed service deliveries, and cases of customer dissatisfaction are all benefits of a developed hierarchical structure. Aggravation and frustration among both employees and customers come as a result of staff being overworked as they attempt to complete tasks meant for multiple individuals. This causes some employees to be deliberately insensitive to the needs of the client since they feel overburdened. In that regard, managers should assess personnel requirements and ensure that the business has enough skilled specialists on board to cover regular shifts for the provision of smooth, customer-friendly services and maintenance of a proactive organizational structure.
References
Auchter, A. M., Mejia, M. H., Heyser, C. J., Shilling, P. D., Jernigan, T. L., Brown, S. A., & Dowling, G. J. (2018). A description of the ABCD organizational structure and communication framework. Developmental Cognitive Neuroscience, 32, 8-15.
Eva, N., Sendjaya, S., Prajogo, D., & Madison, K. (2021). Does organizational structure render leadership unnecessary? Configurations of formalization and centralization as a substitute and neutralizer of servant leadership. Journal of Business Research, 129, 43-56.
Eva, N., Sendjaya, S., Prajogo, D., Cavanagh, A., & Robin, M. (2018). Creating strategic fit: Aligning servant leadership with organizational structure and strategy. Personnel Review.
Jonathan, G. M. (2018). Influence of organizational structure on business-IT alignment: what we do (not) know. In 17th International Conference Perspectives in Business Informatics Research (BIR 2018), Stockholm, Sweden, September 24-26, (pp. 375-386).
Joseph, J., & Gaba, V. (2020). Organizational structure, information processing, and decision-making: A retrospective and road map for research. Academy of Management Annals, 14(1), 267-302.
Liu, K., & Lv, F. (2021). Analysis on the organizational structure of Shandong Apple industry based on SCP paradigm. Open Journal of Business and Management, 9(4), 1572-1584.
Marín-Idárraga, D. A., & González, J. M. H. (2021). Organizational structure and convergent change: explanatory factors in SMEs. Journal of Small Business and Enterprise Development.
Schwer, K., & Hitz, C. (2018). Designing organizational structure in the age of digitization. Journal of Eastern European and Central Asian Research (JEECAR), 5(1), 11-11.
Vithayathil, J., & Choudhary, V. (2022). Organizational Structure for the IT Department: Profit Center or Cost Center?Information Systems Frontiers, 1-24.
Winnubst, J. (2018). Organizational structure, social support, and burnout. Recent Developments in Theory and Research (pp. 151-162). CRC Press.
Xianghua, Z. (2020). Organizational structure and standard development procedures of standard development organizations-comparative research based on domestic and foreign perspectives. E3S Web of Conferences, 214, 02043.
Zusman, P. (2021). Participants’ ethical attitudes and organizational structure and performance: application to the cooperative enterprise. Agricultural Cooperatives in Transition (pp. 23-54).