Organizational Design: A Holistic View

By James Triplett

Many elements of an organization's structure are clearly visible, such as organizational charts, categorizations such as a partnership or corporation, job descriptions, and various legal documents yet these still fall short of illustrating how an organization is designed, interacts with its environment, learns, and evolves. The analogy of the blind men feeling various parts of an elephant and coming up with different perspectives is a real phenomenon with organizational structure as well given that various stakeholders will interact with the organizational structure and come away with very distinct views of how the organization is structured. A single or few perspectives of organizational structure then are insufficient to describe a given organization. Systems and the view of structure as recurring activities are the underlying themes of this book.

• Language: English
• Publisher: Lulu.com
• Release date: Mar 29, 2011
• ISBN: 9781257220717

Book preview

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Chapter I - Concept of Organizational Design and Structure

Gibson, Ivancevich, Donnelly, and Konopaske (2006) stated organization structure is an abstract concept which requires researchers to infer the presence of structure by the evidence of its existence (p. 394). Many elements of a structure are clearly visible, such as organizational charts, categorizations such as a partnership or corporation, job descriptions, and various legal documents yet these still fall short of illustrating how an organization is designed. The analogy of the blind men feeling various parts of an elephant and coming up with different perspectives is a real phenomenon with organizational structure as well given that various stakeholders will interact with the organizational structure and come away with very distinct views of how the organization is structured. A single or few perspectives of organizational structure then are insufficient to describe a given organization. Gibson et al. added the existence of structure distinguishes organizations (p. 394). What is needed is a more comprehensive tool, or set of tools, with which to view the distinctions in an organization’s structure and still not lose sight of the elephant. It is from these tools one is able to design an organization that will effectively achieve the stated objectives or to develop strategies for existing organizations that will alter the design or work with the existing design to achieve stated objectives.

One aspect of this comprehensive set of tools is to view organizations from a systems level that examines such internal components as division of labor, departmentalization, span of control, and the degree of authority present. These are not enough though as an organization’s boundaries are not always clear as they interact with other organizations (Scott, 2003). Systems analysis offers a view whereby one organization’s units are more closely linked to an external organizational unit than to an internal unit. Consider the representation of a systems view in Figure 1.

Child and McGrath (2001) suggested that within a given system one needs to consider the interdependence of subunits and the degree of flexibility required to meet the changes the organization faces as an overall management of the scarce resource of knowledge, increasingly the core of organizations. Hanson (1995), Kast and Rosenzweig (1972), Von Bertalanffy (1972), and Wheatley (1999) also recommended that one needs to understand the relationships and interactions within a system.

Figure 1

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A second aspect of the comprehensive set of tools is derived from the view of a structure as recurring activities. Gibson et al. (2006) suggest this perspective focuses on activities performed as consequences of the structure (p. 395). These activities or processes include such things as how the organization communicates within itself and with other organizations, how decisions are made, and how tasks are performed. Malnight (2001) added that core processes, the primary stages along the industry value chain for discovering, developing, and manufacturing products, support processes that were undertaken on behalf of multiple cores processes to meet regional or national requirements, and delivery process that focus on the supply of final products to diverse national markets were primary functions or activities in an organization in general and multi-national corporations specifically (p. 1199).

Systems and the view of structure as recurring activities are the underlying themes, whether apparent or implied, as one progresses through the chapters. The structure of the chapters is such that a single chapter can be applied to a given situation or the whole book can be utilized in a holistic manner.

Chapter II - Goal Achievement

Organizations that wish to be successful in achieving objectives must consider the alignment of organizational and member goals. Consistent with these aspects are similarities between both the organizations and its members, such as the how they are composed, the degree of complexity present in each, and how they learn. Add to these an alternative view of efficiency that is different from traditional process-based approaches and one may realize an alternative perspective with which to successfully lead an organization. A practical set of considerations was synthesized from various reviewed literature in order to provide this alternative view.

Theories of organizational structure should focus on design considerations based on their explicit objectives. Organizational behavior (OB) theories provide one an understanding of how individuals interact with the internal environment and goal accomplishment.

W. Richard Scott (2003) examined rational, natural and open systems in organizations. An understanding of the various theories allows designers to match the goals of the organization with its environment.

Rationality as applied to organizations considered the actions of the organizational members, implementation of goal attainment approaches, and a formalized structure that limited the actions of all members. Scott (2003) stated rational behavior within organizations takes place within – some analysts would argue, because of clearly specified limits (p. 34). The actions of individuals in an organization must first be considered because it was they who were utilized to achieve the desired goals and objectives. Scott felt that all organizations confront a number of common problems: all must define (and redefine) their objectives… induce participants to contribute … control and coordinate these contributions; [and] resources must be garnered from the environment as well as selection of organizational members (p. 11). It was with this in mind that rational theorists approached goal specificity and formalized structure.

Goal specificity was important because ambiguous goals did not provide adequate direction for organizational members. Goals that were clearly and objectively stated provided members with rules and procedures in the activities to be conducted and led directly to formalization, the next aspect of the rational system school of thought. Formalization considered the degree of rules and procedures that affected the participants and the tasks they performed. Scott (2003) suggested formalization may be viewed as an attempt to make behavior more predictable by standardizing and regulating it (p. 35). Predictability was important in the rational perspective because it reduced uncertainty and was able to provide an objective approach to decision making. This became more important as the size of the organization grew because the scope and focus of control increased beyond what any one person could hope to maintain on his or her own.

The most important advantages of the rational school of thought were the focus toward achieving organizational goals, the equality that members expected, and its effectiveness when used for large organizations. A disadvantage was based on claims that the structures were dehumanizing and did not allow for human growth and development. A second disadvantage was the inapplicability of it for small organizations.

The natural system school of thought emerged as a result of the perceived disadvantages of the rational school of thought. The natural system considered goal complexity but, unlike the rational system, placed a far greater emphasis on human behavior as researchers sought to understand the relationship between normative or predicted actions and what actually occurred. Scott (2003) suggested differences between stated and real goals and the goals of each individual were addressed by the natural system theorists with respect to goal complexity (p. 57). The conclusion was that each individual possessed his or her own goals as well and could be expected to be distracted from accomplishing organizational goals because of conflict with their own goals. Survival of both the individual and the organization as a social mechanism were the focus and they relied on each other for their continued existence.

Organizational structures were addressed by the natural system but not in the same manner as the rational system theorists. Scott (2003) stated that the natural system theorists do not deny the existence of highly formalized structures within organizations, but they do question their importance, in particular, their impact on the behavior of participants (p. 59). Organizational members bring their personalities to the organization and the interactions of each personality with those of the other members created an informal structure that coexisted with the rules, norms, and procedures of the formal structure. It was the informal structures and their potential to exert powerful influences on participants that could overwhelm and even force the formal structure to a marginal role and result in organizational failure if not properly contained.

A third aspect of the natural systems was functional analysis. Scott (2003) summed this aspect up as the existence of some practice or behavior [that] is explained in terms of its consequences – the functions it performs – rather than by reference to its origins (p. 60). Another way in which it may be understood was that practices occurred because they were needed for survival of the system and were accepted as long as the system remained in balance.

Open systems were put forth as a collection of interdependent yet semiautonomous parts that ranged from simple and stable to complex and dynamic. This perspective was the result of an evolution from the simplistic rational system through the organic natural system to the more complex one found in open systems theories. The loose coupling of the organizational parts was such they allowed for rapid adjustments in the face of dynamic and unstable environments.

The loose coupling contained drawbacks as well. It must also be noted that the degree of authority ranged from relatively tight to an almost complete lack of control and that loose coupling need not signify either low moral or low managerial standards (Scott, 2003, p. 89). However, the lack of control led, in some instances, to decisions and actions that did not result in increased benefits to the organization and its members.

Other characteristics of the open systems approach were self-maintenance, negentropy, morphostasis, morphogenesis, and hierarchy in the form of clustering. Self-maintenance involved interaction with the environment in such a way as to allow the organization to obtain the energy and resources necessary for throughput of activities but also to allow it to maintain itself and the interdependent parts contained within its boundaries. Entropy is a thermodynamic term that focused on energy that cannot be turned into work while negentropy, considered in light of the open system’s ability to acquire energy from its environment, was negative entropy whereby organizations acquire inputs of greater complexity than their outputs such that they are able to restore their energy, repair breakdowns in their organization, and may improve their structures and routines (Scott, 2003, p. 90). When taken to an extreme, organizations were considered to possess the ability to grow increasingly complex in such a way that the only way they could be understood is by the concept of the loose relationships found in the open systems theories.

The increased complexity of organizations as they evolved was better understood by utilizing the concepts of morphostasis and morphogenesis. Morphostasis was defined as those processes that tend to preserve or maintain a system’s given form, structure, or state while morphogenesis was given as processes that elaborate or change the system – for example, growth, learning, and differentiation (Scott, 2003, pp. 90-91). These processes arise as organizations adapt to their environment and evolve toward increasingly complex structures that in turn allow them to better interact with a dynamic environment. The limit of complexity is the complexity and dynamics in the external environment.

Hierarchy in the form of clustering was best described as systems that are composed of subsystems and may themselves be subsystems of other larger systems. Hierarchy should be considered as a clustered form that explained the loose coupling found between complex systems. Scott (2003) suggested that hierarchy of loose connections found in complex open systems meant the connections and interdependencies within a system component are apt to be tight and of greater density than those between system components (pp. 91-92). This tight and dense structure allowed subunits to exist as semiautonomous units that enabled them to change or evolve as a result of changes in the environment with minimal supervision from the organizational head. However, being semiautonomous did not mean that the units would act in line with overall organizational objectives. Consideration of individual’s self-interest with that of the subunit was necessary to ensure that dysfunctional behavior by both parts did not occur.

Chris Argyris (1987) was concerned with the inconsistencies between research and models that focused on the interaction between followers’ personalities and the organization’s structural design. He set out to analyze the relationships and develop a useful model organizational designers could use to structure an organization’s internal task environment and accommodate followers’ personalities. It was his belief that the negative aspects, such as failure to accomplish goals and objectives, follower frustration, and poor leader-follower relationships organizations face were the result of inconsistencies between follower personality and organizational goals.

The focus of the research was based on the personality of followers and the organizational structure. Argyris (1987) began with a summary of personality that:

is conceptualized as (1) being an organization of parts where the parts maintain the whole and the whole maintains the parts; (2) seeking internal balance … and external balance; (3) being propelled by psychological … energy; (4) located in the need systems; and (5) expressed through abilities (Argyris, 1987, p. 141).

This definition of personality was followed by operational definitions derived from observations. Argyris felt the self … tends to develop along specific trends that started with a passive and dependent infant state and progressed toward an active and independent adult state, developed from a capability of a few behaviors to many dynamic ones, and from an erratic short-time perspective as a child to a deep longer time perspective (p. 142). These characteristics allowed Argyris to plot an individual’s profile, which he called an individual’s self-actualization, along a continuum. An individual progresses from the dependent end toward the independent end, but with varying rates of progress and an ending point between the extreme end points.

Argyris (1987) then turned to an analysis of organizations and their structures. Organizational design was traditionally addressed through rational processes. Argyris stated that organizations are formed with particular objectives in mind, and their structures mirror these objectives (p. 144). The problem was that followers with their diverse personalities may not fit the desired goals and objectives and thus the organizational structure. Organizations needed to be planned and designed with follower personality in mind.

Task specialization in an organization focused on finding the most efficient way to