Introduction
It can be stated that the main factor in the formation of organizational structures is the desire to control the production and the manufacturing process, the division of labour, and the occurrence of management functions. Collaborative work, the cooperation of labour force created a new type of relations, which were established as relations between the participants of production process, i.e. supervisors and subordinates.
Such relations can be seen as constantly evolving, forming new configurations in terms of structure. Organizational structure can be defined as those fixed relations that exist between the departments and the employees of the organization. It can be understood as an established scheme of interaction and coordination of technological and human elements within the organization. With different distinctions between various organizational structures, this paper analyzes the organizational structure, based on the case study of W.L. Gore & Associates, in terms of its distinguished organizational structure, their advantages and disadvantages, and the relationship with external companies.
Gore’s Organizational Structure
Overview of the Company
W. L. Gore & Associates, Inc. is privately held manufacturing company founded in 1958, and headquartered in Newark, Delaware. The company’s main specialization is fluoropolymer products, although the company is also known for cable assemblies and components and outerwear products. The company currently employs more than 9000 employees, who are called associates, in 30 countries worldwide, and for twelve consecutive the company is ranked among Fortune’s annual list of the U.S. “100 Best Companies to Work For” (2009). As of 2008, the company has earned $2.5 billion in annual sales, and is considered as one of the 200 largest privately held U.S. companies (2009).
The Structure
A serious move, defining the organizational structure of the company, was made through eliminating the hierarchy in the company. The latter implied the elimination of status titles, bureaucracy, and new forms of collaborative work. In that regard, classifying such structure, it can be stated that the new form of employees’ relations resembles an organic organizational structure. “An organic structure resembles a network – interactions and communications are more lateral, knowledge resides wherever it is most useful to the organization, and membership requires a commitment to the tasks of the organization” (Griffin & Moorhead, 2009, p. 448). In that regard, it can be stated that choosing an organic structure is a reflection of the strategy direction that the company is taking.
With the main products of the company being dependent on technology and technological innovations, and as one of the goals of the company is to “solve difficult industrial problems with innovative materials and technology” (2009), the choice for organic structure can be seen obvious. In that regard, the organic structures are better suited for changing and innovative environments (Reigle, 2001). Additionally, the term organic is applicable to the culture of the company as well. The latter also is reflected in the strategy of the company, in which the creativity and team-based work is one of the main objectives of the company, in addition to “maximizing individual potential, maintaining an emphasis on product integrity, and cultivating an environment where creativity can flourish” (2009).
Employees’ Individual Differences
A distinct characteristic of the organizational structure in W. L. Gore & Associates is its lack of hierarchy, and in that regard, it can be stated that such factor can be largely connected to the employees in the company and their individual differences. In that regard, the relation between the organization and the personality can be seen in the different types of personality, causing individual differences between employees. Personality is a “relatively stable set of psychological attributes that distinguishes one person from another” (Griffin & Moorhead, 2009, p. 61). The main five personality traits, which are relevant to the context of the organization, can be outlined as follows:
- Agreeableness – the ability to get along with others (Griffin & Moorhead, 2009, p. 61).
- Conscientiousness – the number of goals on which a person focuses (Griffin & Moorhead, 2009, p. 62)
- Negative Emotionality – a measure that determines personal management of extreme mood swings (Griffin & Moorhead, 2009, p. 63).
- Extraversion – the personal comfort level with relationships (Griffin & Moorhead, 2009, p. 63)
- Openness – the person’s rigidity of beliefs and range of interests (Griffin & Moorhead, 2009, p. 63)
The individual differences of the employees can be related to the measurement of each trait between high and low and with the different configurations of such traits. Generally, as the absence of the hierarchy in the company was given in order to enforce communication, team work and creativity, it can be seen that traits might correlate with more or less favourable response of employees. Traits related to communication, such as agreeableness and extraversion can be viewed as the higher the trait the more favourable the response to the hierarchy absence.
Additionally, such trait as openness can also correlate with innovation, in which the less opened the employee is, the less favourable he/she would be to such structure. In the case of the latter, the example of Diane Davidson shows the distinction that such trait can made, comparing “traditional, male-dominated business – the men’s shoe business” (Deutschman, 2007), with that of Gore’s.
The number of goals a person can focus on, in conscientiousness, can reflect the self-discipline of the employee and his/her organization, and thus, the need to be supervised or not. Finally, negative emotionality can reflect the reliability of the employee and his/her stability, which in turn can be reflected on the communicative aspects, and the need of hierarchy for supervision.
Advantages and Disadvantages
There are several advantages and disadvantages of the structure implemented in Gore’s company, which can be distinguished by the perspective of the organization and the employees.
The Company
From the perspective of the company, the advantages and the disadvantages of the structure can be seen in the following few points.
Advantages
- Tremendous growth and Profit
- Leading in Innovations
- Competitive advantage in human resources
Disadvantages
- Large dependency on individual characteristics of the employees
- Difficulty in management and coordination
- Differences in the qualifications of the employees within the same functional team might lead to delays and mistakes
- Frustration of new managers and employees
The Employees
From the perspective of the employees, the advantages and the disadvantages of the structure can be seen in the following few points.
Advantages
- Collaboration in work
- Creative freedom
- Lack of bureaucracy
- Everyone’s your boss and no one’s your boss
Disadvantages
- Multiple task, which are usually separated in other organizations
- Everyone’s your boss and no one’s your boss
- Long adaptation period
Relationship with External Companies
The relationship with other companies can be seen as one of the factors forming the external environment of the company. In that regard, when forming the organizational structure a lot of importance is given to provide the structure with the dynamics to adapt to the constant changes in such environment. In that regard, it can be stated that the organic structure, i.e. the model structure with which Gore’s structure can be resembled implies the capability for a faster reaction to the changes in the environment. Thus, it can be stated that without considering the structure of the external company, the design of Gore’s organization favourably influences the relationship with external companies.
If specifying the external companies, as those with hierarchical structure, it can be seen that such structures might hinder the development of the mutually beneficial relationship between companies. In terms of the latter, specifically such factors can be outlined as bureaucracy, dependency on management, lack of flexibility, difference in the criteria of quality and effectiveness of work, and difficulties in adaptation.
Conclusion
It can be concluded that the approach taken by W. L. Gore & Associates in forming their organizational structure proved its potential, according to their financial results. The existence of several disadvantages for both the employees and the company, does not oppose the fact that such approach might foster certain necessary elements in the organization such as creativity, communication, and innovation. In that regard, it can be stated that in the case of W. L. Gore & Associates, taking such innovative approach was beneficial.
References
Deutschman, A. (2007). The Fabric of Creativity. Fast Company. Web.
Gore. (2009). About Gore. Gore Homepage. Web.
Griffin, R. W., & Moorhead, G. (2009). Organizational behavior : managing people and organizations (9th ed.): Cengage Learning.
Reigle, R. F. (2001). Measuring organic and mechanistic cultures. Engineering Management Journal. Web.