Organizational Structure

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MBA 621

Organizational Structure

Organizational structure plays an important role in day-to-day functions of an organization. The delegation of authority, work specialization, and employee reporting framework are some of the elements that help determine what the organizational structure should be. An efficient structure will facilitate decision making and smooth the span of control or scope managers have over operations. The first and most common structure type that managers would choose for a manufacturing firm when cost-minimizing is the primary strategy would be the form of bureaucracy. Preferred especially when highly routine activities produce volumes of identical products, a bureaucratic organizational structure allows for efficient production through high formalization and standardized operations. Also common in mass production companies is the separation of work activities into specific departments. This separation allows for inexpensive labor costs because employees are only specialized in one area or functional department therefore requiring less overall knowledge and talent to perform it successfully. The cost of middle and lower level managers is also reduced due to the centralized decision making process. Mintzberg in 1979 stated that "Organizations having a pure bureaucratic structure tend to be old, large, and regulated". When an industry or environment in which an organization is working becomes completely static, the bureaucratic type of structure may work perfectly well. The problem is, however, that it is rare to find any modern economic market that will remain completely static. So in the scenario presented, a mechanistic model with rigid departmentalization and high specialization may be successful in the short term of the business life, but eventually the tall hierarchy will become outdated. In order to properly design a structure for the production business...
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