Traditional Vs. Contemporary
Traditional Organizational Structure
The traditional organization is a pyramid with a president at the top, a few vice presidents, layers of management and the majority of employees at the bottom. Jobs are specialized, and information and authority flow from higher to lower levels. In recent years, a variety of organizational structures have come into fruition, such as matrix (flat), networked or virtual. But, the traditional, hierarchical organization still exists. The traditional organization is lead by a President/CEO, followed by the COO/CFO, followed by department heads and then employees within each department. President/CEO
The President or Chief Executive Officer (CEO) is the lead officer of the organization. He is responsible for carrying out the directives and initiatives set forth by the board of directors. He reports directly to the board of directors and ultimately the stockholders. COO/CFO
The Chief Operating Officer (COO) and the Chief Financial Officer (CFO) are next in line to the CEO. They are often referred to as vice presidents. The COO and CFO report directly to the CEO. Department Heads
Department heads manage each individual department, such as human resources, accounting, information technology and engineering. Department heads report to the COO or CFO or some combination of both. Employees
Employee’s carryout the day-to-day work required to produce and deliver products and services sold by organizations. They report to the department heads. Weaknesses of Traditional Structure
A strict hierarchical organization hinders response to rapidly changing environments. It is slower to react to changes in market conditions, and less efficient in taking advantage of knowledge introduced from a variety of sources on the ground.
Contemporary Organizational Structure
The contemporary design flattens the traditional pyramid structure, facilitates the flow of information to all parts of the...
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