Pros and Cons of Modern Organizational Structures
Pros and Cons of Modern Organizational Structures
David R. Beavers
Pros and Cons of Modern Organizational Structures
Every organization needs just that – organization – in order to function efficiently. Just as there are many different types of businesses, there are also many methods of organizational structures to assist the business in being managed well. The question remains: how do you choose which organizational structure to base the management of your business on? In order to make a well-informed decision, we must first recognize the pros and cons. We will look at the positives and negatives for three types of organizational structures: matrix organization, boundary-less organization, and the organizational learning environment.
Matrix Organizations
Matrix Organizations have a system where employees may have two (or more) managers; e.g., a departmental manager and a project or product manager. Organizations that have a matrix-based structure can be extremely efficient, with the department manager having authority over the employee in regards to the company policy (such as coaching, managing vacation requests, one on one meetings, reviews, etc.), and the project manager having authority over the employee in regards to the project (deadlines, delegating tasks, overseeing production, etc).
The largest positive of a matrix organization is an exceptional level of communication between all parties. It’s no secret that communication is vital to efficiency – when everyone is on the same page and understands what is going on, there is little room for errors due to miscommunication or replicating work. The project manager, ensuring cooperation between each department to focus on completing the task at hand, can manages multiple departments working on the same project to ensure production and workflow is quick and effective. Teamwork, communication, and cooperation make up the foundation upon which the matrix organization is built.
This type of structure is fantastic when all the pieces work together in fluidity. However, this is ideal – and the real world is almost certainly never ideal. While matrix organizations are potentially very effective from a production standpoint, a realist must look at the toll that it takes on the employees. Having more than one manager to report to can be confusing if the lines on who is responsible for what are blurred, or if one employee is working on multiple projects in the same capacity. Additionally, this may also bring internal conflicts over which manager is responsible for effectively managing the employee – is the employee’s departmental manager responsible for coaching the employee when they fail to meet a deadline, or is the project manager? Is the employee given too many tasks to complete? How can the departmental manager coach the employee if they have a hands-off approach to what the employee is doing on a daily basis unless the project manager informs them? Conflicts over authority are a definite risk caused by matrix organizations.
Boundary-less Organizations
Boundaryless organizations are made up of many different designs – such as modular organization and strategic alliances. Have you ever been told to “think outside the box” when presented with a problem? Boundaryless organizations take this to the extreme – doing away with the classic ethos of how businesses should be run and instead substituting something unorthodox. Nobody in a traditional business would ever think of working together with their competitor to market or produce one of their products, but in strategic alliances, the boundaries of relationships are brought down – maybe not completely, but to a very noticeable degree. Maybe you’re in an area where you just simply don’t have qualified applicants – modular organizations overcome this challenge by having all non-essential functions outsourced to other companies or suppliers.
In a management perspective, boundaries between employees and management – both physical and intangible – are broken down. Open floor offices are a good example of this. Without walls, there is a definite sense of mental “freedom”; employees are generally happier by not being boxed in. Communication between departments can be swift, working atmospheres can be bolstered by creating a feeling of togetherness. Employees may be more inclined to take on more responsibility, wanting to help their department (or organization as a whole) based on a sense of camaraderie and belonging.
However, there are cons to this type of organizational structure as well. Such open-floor plans, depending on the type of business, can become loud or allow for plentiful distraction. Additionally, if you break down the intangible barriers between employee and manager, it can almost seem like you take away that manager’s authority as well – making employees more independent (and possibly harder to control).
Learning Organizations
“Once bitten, twice shy” may be the motto for learning organizations, who seek knowledge and then apply the knowledge to change their organizational behavior. As the company grows, it learns – whether by the failures or successes of it’s own risks or by the risks of others. Taking chances, facing risks, trying new things and seeing if they work – these are all instances of how learning organizations operate.
As an employee, taking the consequences of failure in trying new things seems almost unheard of in traditional organizations. Learning organizations actively support trying new things – after all, risk isn’t without it’s rewards – and the reward for a learning organization is two-fold: if it works, it’s a success, and if it fails, they now have experience to not make the same mistakes in the future. This can have an overwhelming impact on encouraging employee’s critical thinking abilities and supporting a high morale, creating happier employees and therefore harder working employees.
The downside of this, is risks are risks for a reason – and a big enough risk can end in catastrophic failure. Additionally, it can lure employees into a false sense of security – that no action has consequence. However, each risk does have a consequence, though it may be unseen to the employee – for example, a failed project can mean thousands (if not millions) of dollars of deficit for the company.
Conclusion
Overall, each organizational structure does have its benefits. I personally believe that Matrix Organizations are the best, having worked in one before, and they are my ideal type of workplace. When they are fine tuned and implemented well, matrix organizations are some of the most effective structures you can possibly have. The communication and cooperation between different employees, managers, and departments can run a company like a well-oiled machine. Teamwork is the crux of the matrix organization, and with teamwork comes morale, camaraderie, and personal enjoyment. Above all the good feelings, employees in matrix organizations do one thing better than any other – working together to the end result of completing whatever task is set before them.
References
Bauer, Carpenter, & Erdogan (2012). Principles of Management, Unnamed Publisher