Organizational Design and Organizational Behavior

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  • 0:05 Organizational Design…
  • 1:28 How Structure…
  • 3:00 How Work…
  • 4:42 How Centralization…
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Lesson Transcript
Instructor: John McLaughlin
In this lesson, you will learn how two different elements of organizational structure influence the performance and behavior of members of organizations.

Organizational Design and Organizational Behavior

An organization is a group of people who work together to achieve a common goal. People belong to organizations for a variety of different reasons. Some people belong to organizations to learn new things. Members of other types of organizations get together for sport and recreation. And many people join organizations to earn income.

Although there are many different types of organizations, there is one thing that every organization has in common. Every organization must have structure in order to define roles and clarify relationships between organizational members, so everyone knows what is expected of them.

Different organizations use different types of structures in order to effectively and efficiently reach their goals. The strategy an organization uses to achieve these goals, the technology it uses to turn inputs into outputs and the size of the organization all influence which type of structure best suits each individual organization.

Determining which structure works best for the organization as a whole is the goal of organizational design, but how does the application of different structural design components affect the behavior of members of an organization? In this lesson, we will examine how these two elements of organizational structure can impact individual members of organizations.

How Structure Influences Organizational Members

The structure of an organization plays a powerful role in determining how members relate to the organization. The structure of an organization can either provide members with a great deal of independence in how they perform their tasks or constrain them by limiting and controlling their behavior.

For example, people who are members of organizations that have high levels of formalization and specialization do not vary their behavior nearly as much as people who are members of organizations with low levels of formalization and wide spans of control. Members of these types of organizations have much greater freedom in how they perform their tasks.

So, although the structure of an organization plays a big role in determining how people feel about their role in an organization and influences how they do their job, it is very important not to generalize when linking organizational structure to employee performance and satisfaction.

Why? Organizations are made up of people, and everyone is different. Some people are most productive and satisfied in an organization that clearly defines their role, and others prefer the freedom of an organization with low formalization. So, we can't say that every example is true in every case.

In fact, although there are six elements that determine an organization's structure, only two can be shown to be consistently tied to employee performance and behavior. With that in mind, let's take a look at the two elements of organizational structure that can affect employee performance.

How Work Specialization Affects Employee Performance

The degree of work specialization in an organization is determined by the organization's structure. Work specialization is how tasks are subdivided into separate jobs within an organization. The more a job is broken down into small tasks, the more specialization is required by each individual worker. A high degree of work specialization contributes to higher productivity for the organization, but it can also lead to a lower level of job satisfaction for some individual members of an organization.

For example, Zack started working as a pizza chef at Zombie Pizza when it first opened. They didn't have many employees at first, and Zack was the only chef, so Zombie Pizza utilized a low level of work specialization. Zack's job was to make every pizza by hand. He would stretch and toss the dough, ladle the tomato sauce, add the toppings, bake and cut each pizza and serve it to his customers. Zack took a lot of pride in his job and loved getting praise from his customers.

As Zombie Pizza gained popularity, more chefs were hired, which increased the level of work specialization. By adding more people and specializing the jobs, Zombie Pizza is able to make 10 times the number of pizzas that they did when Zack was working alone, but some nights Zack's only task is to fold pizza boxes. So, although work specialization allowed this organization to become much more efficient at making pizza, it also decreased Zack's level of job satisfaction.

That's not to say this would be true in every case. Some people prefer the routine and repetitiveness of highly specialized jobs.

How Centralization Affects Employee Performance

Centralization is another area in which the structure of an organization can influence employee behavior and performance. The degree of centralization in an organization is determined by the structure of the organization and determines 'Where does the decision-making authority lie?' If top management makes all the organizational decisions with no input from lower-level personnel, the organization is considered to be highly centralized.

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