A company has many choices for an organizational design that supports its strategies and goals. A company can build a structure that is rigid and mechanistic and allows managers to exert control, increase efficiency and establish narrow, well-defined jobs. Or it can choose an organic, flexible structure. Organic structures are so adaptable that elements may be semi-permanent or temporary. Such a loose design allows a company to adjust to changing needs.
Mechanistic structures require oversight, which means a layered management hierarchy. That bureaucracy isn’t needed when a company organizes or reorganizes organically. Removing management layers from the organizational chart results in a flattened structure. Supervisory authority, information and decision making must now flow more horizontally instead of moving up and down the structure, as happens in mechanistic structures. In the team organizational structure, for instance, employee groups -- not their managers -- take responsibility for the outcome of a project, process or goal. Their mandate includes decision-making power.
The team and network organizational structures are organic designs. The team structure uses representatives from different processes or functions to create employee teams. For example, a team may contain marketing, financial, research and production representatives. When decisions arise, expertise holds sway. One manager oversees several teams, which can be adjusted, dissolved or formed as needed. The network structure -- also called the virtual structure -- doesn't use internal teams, instead drafting outsiders to accomplish major work functions such as manufacturing. The company hires or releases outside suppliers as needed.
The organic structure suits companies operating in fast-moving, unpredictable environments. Unencumbered by bureaucracy, companies become agile and can change with fluctuating market conditions. Empowering employees by increasing their independence and responsibility fosters creativity and innovation. Improvements can be adopted quickly because no red tape stands in the way. Companies with organic structures see enhanced communication and cooperation. Commitment and morale are high when compared to mechanistic structures.
Companies requiring control over employees or processes might be ill-served by the organic structure. Ensuring customers receive reliable service or a standardized product requires quality control measures and management oversight, as well as specific procedures to accomplish work -- all features of a mechanistic structure. In a stable market environment, the organic structure’s fluid, loose approach to work processes is likely to put it at a competitive disadvantage against a mechanistic structure, which can bring efficiency and economies of scale to bear, moving in a rigid, straight line toward its objectives.
- "Management: Meeting and Exceeding Expectations": Warren R. Plunkett, et al.
- Reference for Business: Organizational Structure
- Pearson Higher Education: Chapter 6 -- Organizing the Business
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