The Unsuitability of the Traditional Forms of Organizational Structure for Leading and Managing Contemporary Organizations
In today's business environment, there has been a growing controversy as to whether conventional models of the hierarchical structure are appropriate for running and overseeing organizations today. The fact of the matter is that today, contemporary companies have taken major strides to become competitive in the bid to increase earnings, and so there has been a need to improve their processes to meet the changes. Perhaps the most effective organizations will recognize that they no longer depend on conventional models of hierarchical structure. Notably, an organizational structure in a business denotes the hierarchical arrangement of the lines of authority that are laid from the senior management to the junior staff, including how various activities and tasks are allocated, coordinated, supervised, and coordinated towards the achievement of the organization's principal goals and objectives. Numerous dynamic changes have happened in the 21st century, and they cannot allow a business to be confined to one structure. Any organization is susceptible to change with the tides in the business world failure to which it can lose its key stakeholders such as customers, investors, lenders, and employees. An excellent organizational structure must help the organization to find new and more straightforward means of achieving its objectives since every business has a mission and a vision it has to deliver. As such, the essay develops an argument on the suitability of traditional organizational structures to the operations of a contemporary organization or company while acknowledging different perspectives regarding the case.
Types of Organizational Structures
Organisational structures are divided into two categories: the first type comprises of conventional corporate structures while the other consists of modern organizational systems. The traditional organizational one includes the functional structure, the simple structure, and the divisional designs. The latter that fall under the contemporary structure include the matrix, the project, and the learning organization systems. The critical difference between the two categories of the organizational plan is the reporting relationships. The traditional designs follow a strict hierarchical reporting procedure while in the modern corporate designs, the specific and systematic reporting relationships are not a priority (Anand and Draft 2007, p. 330).
The Impact of Technology
Technology is unbelievably one of the reasons why traditional forms of the organizational structure have rendered unsuitability leading and managing companies in the contemporary business world. The 21st century is defined by the widespread growth in technology. In the past, it was amiss in the corporate world. As such, lengthy procedures in the hierarchy of an organization led to the utilization of the traditional structures. Nevertheless, technology has made agencies dynamic. Therefore, the Internet has integrated junior staff and the senior management at the same level where they can interact and exchange ideas for the betterment of the organization (Jones and Jones 2010, p.141). For instance, the social media platform has brought together employees, management, and the customers; thus, the administration is now able to learn the needs and the tastes of customers through communication that has been enhanced by technology.
The Importance of Innovation
On the other hand, technology comes with innovations. Most companies are utilizing their staff in a different way than they used to do in the past. While, previously, employees had to follow job instructions to the latter, nowadays, they are not restricted to their job requirements. In fact, the management has ensured it brings into the company innovative employees while also training the existing ones. Consequently, traditional organizational structures have been compromised. It is noteworthy that innovation among the employees allows them to think how they can use innovative ideas in the business so that it can competitively be advantaged. With that in mind, employees' autonomy does not confine them within the traditional structures where they have to report to their supervisors everything that they do or even follow the hierarchy when raising an innovative idea to the executive of the corporation (Jones and Jones 2010, p.147). Present companies that have embraced innovations are referred to as learning firms. Such organizations have a design that actively seeks to acquire knowledge and change the behavior. Companies that have obtained new expertise through experimentation encourage risk-taking, and where a project does not work, the failure is tolerated. With that in mind, companies of such a type are more likely to adopt new structures that allow opportunities for trial and error; hence, those that have been used in the past are not suitable in the modern-day context.
The Impact of Formalization and Centralization
Traditional forms of the organizational structure are associated with significant formalization, which is the extent to which the company's policies, rules, procedures, and written job descriptions are enunciated and followed. Though it helps a group to ensure that employees are focused on performing their duties by following the proper procedures and reducing the ambiguity of roles, it kills innovation (Kornberger 2017, p.180). Workers are restricted from thinking further about how they can use their capabilities and entrepreneurial characteristics to help the company attain their goals and objectives within a shorter span of time. To that effect, the activities of many organizations such as allowing employees to be innovative as possible have influenced the approach of teams towards the traditional organizational designs.
The Importance of Teamwork and Focus on Products/Services
Main categories of the traditional organizational structure focus on centralization. Centralized organizations have the top management as the chief decision-makers in the business. However, such consolidation has not been good for contemporary corporations due to the existence of inefficiencies. Organizations are currently finding it time uneconomical to wait for decisions from a section of the teams. In fact, when the determination is made by some members of an organization, it affects the morale of the workforce due to the limitation presented by a structure. As such, to minimize the complexities, contemporary businesses have moved away from such bureaucracies and hierarchical decision-making to allow efficiency and, eventually, success (Miterev et al. 2017, p. 484).
Most of the contemporary organizations have begun to focus also on their products and services. The reason for it is the need to provide quality in the market while being competitive to make a business a brand. The focus on a product or service entails all members of the company working towards the same project to improve its worth. In that regard, some members of the organization cannot be left outside with the assumption that a specific project does not involve them, as it happens in traditional structures. The need to include every member of the organization has, therefore, led to the exit of conventional structures and an embracement of contemporary compositions so that employees do not fail to engage in a project with the argument that it does not fall in their functional unit (Miterev et al. 2017, p. 479-491).
The Global Perspective and Outsourcing
Besides, in the bid to stay on top of competitors in the industry, a contemporary organization cannot afford to surpass the advantages of teamwork in a group. The productivity of employees working as a team exceeds that of workers performing within their division and according to their functional units. Hence, the fact that traditional structures are characterized by employees either working in their department or the functional group makes the organization inefficient, thus making it unable to make progress in achieving their mission, vision, and goals. As such, traditional forms of organizational structure cannot be affirmed as suitable for contemporary organizations (Child 2015, p.214).
It is arguably correct to note that no specific structure is workable for any organization. Although enterprises confine themselves to one particular structure to achieve goals, many factors inhibit the usage of one invariably in the firm. Since every business must have started from somewhere, its growth has obtained a relationship with a change of the structure. In fact, a majority of the business start-ups begin with a founder who is solely responsible for all the operations in the business (Le Masson et al. 2017, p.79). Nevertheless, as an enterprise begins to grow, a change in the activities of the business occurs, and it becomes almost impossible for a company to be run by a single individual. Such growth is attributed to the development of the structure that can suit the organization in the bid to maximize its ability to make profits.
The stiff competition among companies has also made contemporary enterprises abandon traditional organizational designs. Contrary to the past, the number of business organizations has risen. Every company has been struggling to occupy a more significant market share to earn a competitive advantage. Among the several strategies that managers have utilized, there is a change of the traditional structure into the contemporary ones to ensure a more comprehensive approach to the needs of customers. Besides, there has been the need to increase efficiency since a slight improvement in the business can lead to receiving more returns. Companies have realized that the management requires a supportive workforce that can keep the organization abreast of how products and services can be improved to beat those of competitors. Notably, employees are a crucial asset in agencies and possess ideas that cannot be bottlenecked; hence, a more accommodating structure needs to be employed (Kornberger 2017, p.186).
Other dynamics that exist among businesses in running their operations using contemporary compositions are international growth and the expansion of trade overseas. Most of the large multinational corporations acting in various parts of the world today had to expand to serve the vast array of consumers across the globe. However, with an organization being led and managed using a traditional organizational structure, the needs of clients in the overseas regions cannot be served adequately. Most real-time agencies have been unable to adapt globally due to decisions affecting the organization being made at the headquarters (Le Masson et al. 2017, p.234). Specifically, the first disadvantage is that there will be slow decision-making. Secondly, the decisions made by the authority at the top may not reflect the needs of the local population overseas (Anand and Draft 2007, p. 342). The one-size-fits-all decision-making characterized by a traditional organizational culture does not benefit the organization at all. Indeed, such structures only make the company lose global customers. Thus, the best way in which contemporary and ever-expanding firms can ensure their markets are served sufficiently is by changing the traditional structures that compel the organization from advancing its market efficiently.
Presently, many organizations have become boundless implying that they do not rely on a large internal workforce to manage its functions. Therefore, the company outsources all non-essential services to consultancies and suppliers while remaining with core, value-generating, and strategic roles within its control. The idea behind the eradication of nonessential services has rendered traditional organizational designs less useful. For instance, one of the contemporary companies that have utilized the boundless corporate design is Toyota Company whereby it relies on most of its services from its vast number of suppliers. As such, unlimited contemporary companies minimize their vulnerability to high hierarchical traditional structures that hinder the process of strategic decision-making (Le Masson et al. 2017, p.209).
Other contemporary companies have formed strategic alliances that are formed when different competitors that deal with the same products and services establish a partnership or a venture to help the companies sell their products through a collaborative mechanism. Such joint work has abandoned the traditional model of the structure since no conventional organizational system can fit appropriately in such a case (Kornberger 2017, p.181). As a result, companies in the contemporary business world are adopting new arrangements that can deliver profitable returns without undergoing the cumbersome hierarchical procedures. Modern organizations that have formed strategic alliances are Starbucks and Pepsi Company that agreed to sell the Frappuccino cold drinks. With such a move, both companies stop using their traditional organizational designs as they would prove inefficient in the successful marketing of the particular product.
In summation, most contemporary organizations can achieve the overall success if they abandon the traditional organizational structures. With the complexity, slow decision making, confinement of ideas, centralization, and inefficiencies, the best way a company can ensure it fits into the ever-fast changes in the 21st century is to disengage its members from following tall hierarchical traditional designs. Such designs have disadvantages that exceed the benefits and, keeping in mind that each organization strives to make an extra effort to be competitive, new structures that accommodate flexibility should be adopted. Agencies should be in a constant process of reviewing their arrangements so that they can be in a suitable situation to adapt to changes in the future. While there may be contradicting perspectives on the idea that the traditional structures could benefit present-day organizations, it seems that there would be no long-term success attributed to the old structures. As technology continues to transform the organizational landscape, the wealthy corporations of the imminent years will likely be those that can move with speed, acclimate more quickly, acquire information more rapidly, and embrace forceful demands of the market. Organizations should evolve with their structures to ensure their decision-making corresponds with the current trends and changes of the 21st century.
References
Anand, N. and Daft, R. L., 2007. What is the right organization design? Organizational Dynamics, 36(4), pp. 329–344.
Child, J., 2015. Organization: contemporary principles and practice. John Wiley & Sons.
Jones, G.R., 2010. Organizational theory, design, and change. Pearson.
Kornberger, M., 2017. The visible hand and the crowd: analyzing organization design in distributed innovation systems. Strategic Organization, 15(2), pp.174-193.
Le Masson, P., Weil, B. and Hatchuel, A., 2017. Design theory: methods and organization for innovation. Springer.
Miterev, M., Mancini, M. and Turner, R., 2017. Towards a design for the project-based organization. International Journal of Project Management, 35(3), pp. 479-491.
