Chapter 6: Organization, Structure and Design

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Chapter 6 Organization, Structure and Design
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Chapter aims

• Introduce mainstream and critical approaches and
  assess the contributions of each
• Explore the difference between classical and
  modern thinking about organization
• Clarify the relationship between formal and
  informal features of organizing

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Overview

• Mainstream approaches
• Classical attempts to identify universally
  applicable principles of organizing
• Modern highlights importance of adapting
  organizational design to the contingencies of the
  context
• Critical approaches
• Challenge assumptions around impartiality and
  rationality
• View structure and design as cultural and
  political
• Attentive to issues of power, inequality etc.
• Assumes conflicts are endemic to organizations
• Aims to illuminate and question control

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Mainstream approaches Introduction

• Organization structure
• the sum total of the ways in which it divides
  its labour into distinct tasks and then achieves
  coordination between them (Mintzberg, 1979)
• Components of structure
• Grouping of people into teams or departments
• Allocation of activities and responsibilities
• Reporting lines and the number of subordinates
  that report to a boss
• Lines of communication
• Monitoring of performance and design of reward
  systems

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Classical theories

• View organisations as machines
• Attempt to develop a systematic and rational
  approach
• Development of universal principles to guide
  management practice
• E.g. Fayols basic principles of administration
• Functional division of work
• Hierarchical relationships
• Bureaucratic forms of control
• Narrow supervisory span
• Closely prescribed roles
• Limitation
• Excessive emphasis on vertical reporting hinders
  communication across functions
• Matrix structure attempts to resolve this

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Matrix structure
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Modern thinking

• Abandons search for universal principles
• Best designs and structure are those that have a
  good fit with the environment
• E.g. systems thinking
• Analyses activities in terms of inputs, process
  and outputs
• Focus on interdependence between parts
• E.g. contingency theory
• Accounts for changing environmental demands and
  opportunities
• Both approaches emphasise the formal aspects of
  organizations and largely exclude the informal

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Organizations as open systems
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Formal and informal aspects

• Formal
• Planned, procedural
• Officially sanctioned
• Fixed and rigid
• Based on authority
• On the record
• Reliant upon position

• Informal
• Emergent, pragmatic
• Officially illegitimate
• Dynamic and flexible
• Based on trust or reciprocity
• Off the record
• Reliant upon personal affinity or political
  allegiance

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Other mainstream perspectives

• Institutional economics
• Focus on cost-effectiveness of organizations in
  relation to market-based ways of doing business
• Institutional theory
• Sees organizations structure as the product of
  historical and cultural relations rather than
  rational design
• Resource dependency theory
• Focus on the dependency of organizations on
  unpredictable supplies of resources
• Population ecology theory
• Structure dependent on the nature of the
  environment
• Network theory
• Emphasises interdependencies within and between
  organizations
• Virtual organization
• Made possible by electronic technologies

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Techniques for changing design

• Business process reengineering (BPR)
• Reorienting businesses around processes rather
  than function
• Heavy emphasis on entrepreneurialism
• Widespread use of information technology

• Total Quality Management (TQM)
• Continuous improvement of internal processes
• Creation of organizational culture with strong
  customer orientation
• teamworking

A hard approach
A soft approach
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Assessing mainstream approaches

• Contributions
• Recognize the critical importance of design
  because of the assumption that structure largely
  determines behaviour
• Emphasize importance of organizations adapting to
  the environment
• Limitations
• Reinforce an unrealistic technical rationality
• Ignore the capacity of individuals to change
  structures
• Assume a consensus amongst managers/employees
  which is unrealistic

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Critical approaches

• Challenge the meaning given to structure in the
  mainstream
• highlight issues of power and inequality in
  organizational design
• Expose how employees identities and insecurities
  are exploited to curtail their freedom even when
  claiming to extend it
• Share a belief that structure becomes reified
• i.e. to regard it as having an independent
  existence rather than being a human creation.

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Critical approaches

• Argue that systems thinking marginalises the
  human, political and process dimensions of
  organization and management
• Even when the informal is acknowledged, the
  mainstream tends to see this as something to be
  eliminated/constrained.

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Consensus/Conflict

• Mainstream thinking assumes consensus as the norm
• Conflict an aberration that managers must resolve
• Critical approaches focus on conflict and
  domination
• Argue that consensus is often forced
• Shows the weak position of employees rather than
  harmony
• Structure sustains this forced consensus,
  especially when presented as the one best way
  of organizing

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Exploring the context

• Mainstream thinking takes for granted the
  presence and virtue of capitalist principles
• Critical approaches explore this context in
  detail
• E.g. Braverman (1974)
• Argues that the structure and design of work
  under Taylorism alienates workers from their
  labour
• Limitations
• Lack of regard for the subjectivity of labour
• management seen as all-powerful yet managers
  routinely rely on employees for co-operating,
  generating knowledge
• Fails to see that Taylorism is not necessarily
  the most effective way of organizing work
• Implies that all managers agree with Taylorism
  and fails to acknowledge existence of hierarchies
  within management itself.

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Dialectic of control

• Work is a social accomplishment
• All activities involve an interdependence between
  groups (e.g. workers/managers lecturers/students)
  
• Groups have different access to resources (e.g.
  status/qualifications) but none has a monopoly of
  control
• Organizational structure depends on cooperation
  and collaboration
• Suggests an alternative view of power
• power a relationship and depends on those
  subjected to it consenting with its demands

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Self-discipline and the panopticon

• Direct control replaced by forms of surveillance
  and discipline that operate at a distance
• 2 mechanisms
• Hierarchical observation management exercise
  power through its surveillance of workers
• Normalizing judgment the punishment of those
  who stray from the norm
• Examination the combination of hierarchical
  observation and normalizing judgement
• Intent is to produce self-disciplining
  individuals
• Discipline is enabling as well as constraining
  and may be welcomed by workers
• Organization structures determined and maintained
  by disciplinary power

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Critical approaches Limitations

• Can be too human-centred
• May neglect the global nature of capitalism
• May neglect the domination of financial power
• Can be theoretical and idealistic rather than
  practical and pragmatic