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Emerging structural forms - Coggle Diagram
Emerging structural forms
In the same way that emergent strategy almost inevitably builds upon rational strtategy, so emergent structural forms build on and adapt the more traditional organisation structures. The emerging forms are reactive to the chages in social expectations, globalilsation and the ever-changing capabilities of technology.
Growth and change
While many organisations continue to operate very successfully using differeing types of traditional organisational structure, adapting and evolving as required with their changing business requirements, the rapid change in societal expectation, transparency and the explosion in the use of internet and cloud-based technology requires us to consider the world as it is today and how we can enable the different types of organisational structure
In a traditional structure we would expect to find a dominance of centralised and often bureacratic control with clear lines of demcration within a hierarchical structure
In an empowered structure, we would expect to find develoved decision making at many different organisation levels, much greater participation and a far more fluid communciation and accountability structure
Lynch (2015)
identifies a number of environmental changes that have taken place which require the rethinking of organisational structure
Early 20th Century
Uneducated workers
Knowledge of simple engineering
Very early stages of technology
Early concepts of management science and understanding of human behaviour
Growing market expectations
String separation between management and workforce
Early 21st Century
Better education and at higher levels
Computer literacy and wider skills
Complex, computer driven projects
Sophisticated electronic engineering
Differing models of management and human behaviour researched and understood with greater overlap between differing hierarchical levels
Radical growth in markets and market behaviour
Ability to deal in intangibles
Flexibility and innovation
Johnson et al (2017)
recognised three key challenges that 21st century organisations need to recognise and include within their business structure, business models and strategic thinking
The speed of change and increasing levels of uncertainty: the ability of markets to react in an instant and a change in perceived market value wihthin seconds
The importance of knowledge creation and sharing as a fundemental part of strategic success: transparency is seen as a core stakeholder requirement
An accpetance that markets recognise few geographic boundaries: the evolution of multi-faith, multi-cultural societies requiring a wider appreciation and recongition of differing stakeholder expectatons and levels of acceptability
In more traditional structures, strategy and innovation were led from the top of the organisation or through defined speciliast functions. To enable organisational flexibility and the ability to respond rapidly and appropriately to stakeholder expectations and to the required rate of technological response, organisations have had to learn to build flexible structures
Atkinson (1984)
developed a model of the flexible firm which required three dimensions of flexibility driven by market stagnation, job losses, economic uncertainty, technological change and a reduction in the expected basic working hours of employees
Functional flexibility: the ability to redeploy employees quickly and smoothly between activities and task
Numerical flexibility: the ability to change the numbers of people required in line with tasks being completed
Financial flexibility: The need for different methods of remunerating employees to enable functional and numeric flexibility
Boundary-less organisations
All organisations require some form of structure, not least tp enable them to comply with laws, regulations and reporting requirements
The boundary-less suggests that while inevitable boundaries will have to exist, they can be significantly more flexible than in more traditional structures with differing levels of people within the structure being given more autonomy to implement change and be accountable for such change
Askenas (1995)
A social and economic revolution that is manifested in organisations as they shift from rigid to permeable organisational structures and processes
They recognised that the boundary-less concept was not a straight replacement for the more traditional and rigid forms of structure but was a recognition and flexing of the disconnections that existed across all organisational dynamics
They discussed four different dynamics which need to be flexible, either individually or jointly and the strategic impacts that such an approach can drive within an organisation
Vertical
The hierarchical boundaries between people at different levels in the organisation
Horizontal
The silo boundaries that exist between different functions and departments.
External
The micro-level boundaries that are placed between the organisation and its customer, suppliers and regulators
Geographic
The macro-level boundaries that exist between nations, cultures and markets
A key conclusion was that the evolution of the boundary-less organisation aligns with the view ascribed to Mintzberg that the development of strategy needs to be based around emergent 'strategic thinking' rather than the more rational 'strategic planning'. Mintzberg (1994) suggested that
Strategic thinking is what successful companies use to track changing social and economic trends, to assess their implications, to experiment with new ways of doing business and to build on empirical experience. It is about synthesis. It involves intuition and creativity
Modular structures and outsourcing
Atkinson (1984) has begun to explore the notion of a modular organisation structure recognising the difference between core labour, peripheral labour and outsourced tasks
Handy (1989)
took this further and suggested that
While it may be convinient to have everyone around all of the time, having all your workforce's time at your command is an extravagent way of marshalling the necessary resources. It is cheaper to keep them outside the organisation and buy their services when you need them'
Core workers
:The full time employees and provide a range of specialised professional, management and leadership functions across the organisation
Peripheral workers
: part-time casual and freelance workers who are only utilised when the work requires them.
Contract workers
: outside of the core thrust of the firm and are paid for completion of certain routine tasks such as the overnight cleaning of premises
Virtual structures
The rapid growth of technology and the ability to immediately communicate across the world has led to the growth of a totally different type of organisation
The virtual organisation structure is held together through partnership, collaboration, networking and increasingly the maximisation of the use of technology.
Internet communications have allowed the development of virtual organisations where the leadership and administrative centre sits in the cloud and although te thrust of the business might outsource manufactured products from tangivle businesses, the organisation structure has only a net existence.
Determining appropriate structures
There is no one ideal structure that will definitely enable all organisations to achieve their strategic objectives
It is important for every organisation to determine an optimal structure for its operations at any particular point in time, but to continually challenge and be aware of the need for flexibility and structural evolution when required
This is not to suggest that an organisation needs its structure to exist in a state of constantly changing fluidity but that those leading the organisation must ensure a process exists to keep relevant drivers of change on the radar so that change can be proactive rather than reactive, a thought-through action rather than a knee jerk reaction
Handy (1993)
argues that structural form results from the competing pressures of uniformity and diversity
Uniformity
Economies of scale
Procedure interchangeability
Control processes
Homogeneity of products
Specialisations
Central control
Diversity
Differing stakeholder goals
Product differentiation
Changing consumer demands
Technological change
Need for experimentation
Decentralised control
The core questions for an organisation to ask are identified by
Lynch (2015)
and align with the core questions that sit behind the development of strategy
What kind of organisation are we and do we want to be anuthing different?
Who are the influential stakeholders?
What is our purpose?
Mintzberg (1979)
proposed that there are four main environmental characteristics that influence the strategic appropriateness of different organisational structures. He suggested that these will result in six main types of organisational structure
Entrepreneurial
Machine
Professional
Divsionalised
Innovative
Missionary