The Influence of Organisational Structure on Organisational Culture

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The success or failure of an organisation can often be attributed to the sum of their parts such as staff, profit, products, strategy, technology, environment, structure and culture. These parts or factors can directly contribute to the strengths or weaknesses of an organisation and they are all interrelated. This essay will examine organisational structure and organisational culture and the influence mechanistic and organic structures have on organisational culture. Organisational structure, as defined by Hodge, Anthony & Gales (1996), is “the sum total of the way in which an organisation divides it’s labour into distinct tasks and then coordinates them” (p.32). It is a set of structural elements used to manage the total organisation (Davidson, Simon, Woods & Griffin, 2009) and it defines work tasks and processes and define the skills required to perform the required work tasks and processes helping the organisation to meet its goals and objectives (Mintzberg, 1979). As well as defining the division of labour, an organisational structure outlines how authority is distributed amongst staff, departments and divisions. (Hill, Jones, Galvin & Haidar, 2007). There are two primary formats used to distribute authority across an organisation; decentralisation, where the authority is delegated to middle and lower levels managers; and centralisation, where authority is retained by higher level managers. In a decentralised organisation managers are located at different levels of the organisational structure, sharing responsibility for decisions and ensuring tasks are achieved in accordance with business goals or objectives. In a centralised organisation final authority, decision-making and responsibility of the outcomes of the business ultimately lies with the head of the company, such as a chief executive officer or a president (Davidson, Simon, Woods & Griffin, 2009). Organisational structures can be configured in many different designs. Five typical corporate designs are the simple design, the functional design, the divisional design, the conglomerate design and the matrix design (Wood, Zeffane, Fromholtz, Weisner, Creed, Schermerhorn, Hunt & Osborn, 2010). Each style of design has it’s own characteristics distinct strengths and potential weaknesses. The simple design, also known as an entrepreneurial design is where a chief executive officer or an owner of a business takes on the central directive role and has all decision-making authority. This structure is designed to be responsive and is often seen in small organisations or at the beginning or development stage of a business (Mintzberg, 1979). This structure is best for organisations that are simple, informal and flexible. Communication is be informal and there is little requirement for formalised behaviour. Whilst this structure is agile, dynamic and highly responsive it also relies heavily on the skill and knowledge of the executive. This structure results in an organisation being static without much change or growth. An organisation would need to reconfigure its structure to enable it to expand, change or grow. The functional design involves grouping similar or related organisational functions or processes together to create a business unit or division such as manufacturing, operations, marketing, human resources and finance. Organisations with this structure have a sharp division of labour, tend to be deterministic, authoritative, centralised and bureaucratic and have a large managerial hierarchy with large support staff. Communication and behaviour is formal and decision-making is guided by standard operating procedures (Hill & Jones, 2010). A functional structure can provide several advantages. Firstly staff can learn from one another by being grouped together when performing similar tasks becoming better at their jobs and more productive, secondly tasks can be monitored or checked by members of the same group ensuring efficiency and effectiveness of...
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