Back To CourseBusiness 101: Principles of Management
17 chapters | 147 lessons | 10 flashcard sets
As a member, you'll also get unlimited access to over 75,000 lessons in math, English, science, history, and more. Plus, get practice tests, quizzes, and personalized coaching to help you succeed.Try it risk-free
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.
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.
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.
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.
If lower-level managers are involved in the decision-making, then the organization has a low centralization. There is a strong link between centralization and job satisfaction. The lower the amount of centralization in the structure of an organization, the greater amount of participative decision-making takes place, which is positively related to job satisfaction.
For example, Billy is a bicycle messenger in New York City. His job is to pick up and deliver legal documents to a variety of customers throughout the city. His dispatcher gives him explicit instructions on where to go for his next pick-up and/or delivery throughout the day. His organization is highly centralized and leaves Billy no room to make any decisions; he simply does whatever he is told to do. Sometimes, Billy feels like he is treated more like a machine than a person by this organization.
Fran delivers flowers in Fort Meyers, Florida. She picks up her bouquets in the morning and decides in what order she wants to make her deliveries. As long as every delivery is made by the end of the day, Fran is free to plan her route any way she wants. This organization has low centralization and allows for individual decision-making by low-level employees. The freedom Fran is given helps to contribute to the high level of job satisfaction she feels towards her job.
This is not true for everyone though: some people prefer jobs that do not allow for decision-making. To maximize employee performance and satisfaction, individual differences between employees, including personality and work experience, should be taken into account. People tend to stay with organizations whose structures suit their personal preferences.
Let's review. An organization is a group of people who work together to achieve a common goal. There are many different types of organizations, but every organization has one thing in common. Every organization has a structure, which defines the roles and clarifies the relationships between members of the organization.
The founders of an organization consider all the elements of organizational structure and attempt to select the structure which makes their organization as efficient as possible. Consideration should also be given to how the individual structural elements affect the performance and behavior of organizational members. Of the six elements of structural design, two have been proven to consistently impact organizational members: work specialization and centralization.
Work specialization is how tasks are subdivided into separate jobs within an organization. A high level of specialization makes an organization more efficient but can also lead to boredom by organizational members who tire of doing the same repetitive task day in and day out.
Centralization determines 'Where does the decision-making authority lie?' in an organization. A highly centralized organization allows decision-making only from top management, while an organization with low centralization includes input from lower level personnel into the decision-making process. The participative decision-making process, which is a key part of a low level of centralization, is positively related to job satisfaction.
Although these two elements of organizational structure have been proven to consistently impact the performance and behavior of organizational members, it is important to understand that this is not true for everyone. People are different, and while the majority of workers prefer low specialization and centralization, it is not true for everyone. So, when considering the impact that these elements of organizational structure have on members of organizations, it is important not to generalize.
Watching this video lesson could contribute to your ability to examine the two elements of organizational structure and determine their effects on employee performance and behavior.
To unlock this lesson you must be a Study.com Member.
Create your account
Already a member? Log InBack
Did you know… We have over 160 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.
To learn more, visit our Earning Credit Page
Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.
Back To CourseBusiness 101: Principles of Management
17 chapters | 147 lessons | 10 flashcard sets