McShane and Von Glinow state that “the best organizational structure depends on the organization’s external environment, size, technology, and strategy” (409). To identify the best organizational structure for Protegé Engineering, I will first determine what ‘Organizational Structure’ means. In a second step I will analyze its elements and carve out the important components for the considered organization. Finally I will provide a conclusion and recommendation.
In general, organizational structure is related to the way that an organization organizes employees and jobs, so that its work can be performed and its goals can be met. McShane and Von Glinow define ‘Organizational Structure’ in more detail; they state that organizational structure “refers to the division of labor as well as the patterns of coordination, communication, workflow, and formal power that direct organizational activities” (386). To understand what this means we will have a look at each component. The division of labor is related to the “subdivision of work into separate jobs assigned to different people” (McShane and Von Glinow 386). The patterns of coordination refer to the coordinating of work activities between the employees where they divide work among themselves. This process requires coordinating mechanism to ensure the workflow, which means that everyone works in concert (McShane and Von Glinow 386). The primary means of coordination are informal communication which involves “sharing information on mutual tasks and forming common mental models to synchronize work activities”, Formal hierarchy which refers to the “assigning legitimate power to individuals, who then use this power to direct work processes and allocate resources”, and Standardization which involves the “creating routine patterns of behavior or output” (McShane and Von Glinow 387).
We can admit that informal communication is necessary in no routine and ambiguous situations because employees can exchange large volume of information through face-to-face communication and other media-rich channels. Therefore informal communication is important for Protegé Engineering because their work involve new and novel situations when developing specific solutions for each client. Even if informal communication is difficult in large firms it can be possible when keeping each production site small (McShane and Von Glinow 388). Now, that we identified what organizational structure means, and that informal communication is necessary for Protegé Engineering, we need some more information of how structures differ from each other. McShane and Von Glinow state that “every company is configured in terms of four basic elements of organizational structure”; namely: span of control, centralization, formalization, and departmentalization (390). Further on, I will explain these four elements and carve out what this means for Protegé Engineering.
The span of control “refers to the number of people directly reporting to the next level hierarchy” (McShane and Von Glinow 390). Today’s research found out that a wider span of control (many employee directly reporting to the management) is more appropriate especially for companies with staff members that coordinate their work mainly through standardized skills and do not require close supervision - like the highly skilled employees of Protegé Engineering (McShane and Von Glinow 390-391). However, McShane and Von Glinow also state that a wider span of control is possible when employees have routine jobs and a narrow span of control when people perform novel jobs. This statement is based on the need for frequent direction and supervision. Another influence on the span of control is the degree of interdependence among employees. Employees that perform highly interdependent work with one another need a narrow span of control because they tend to have more conflicts with one another. I assume that the employees...