Organizational Structure And Efficiency Essay

1666 words - 7 pages

How an organization is structured is becoming more and more important in today’s business world. The structure of the organization is one of the important factors that determine employees’ efficiency in performing their tasks. This paper will concentrate on how organizational structure affects the efficiency of work done by employees’. Six key elements of an organizational structure will be followed by three common organizational structures. Efficiency of employees will be brought about relating to the above mentioned.

“An organizational structure defines how job tasks are formally divided, grouped, and coordinated” (Robbins, Judge and Campbell, 2010, p.429). Efficiency means, “When someone or something uses time and energy well, without wasting any” (Cambridge Learner’s Dictionary-3rd edition). When managers decide on an organizational structure, they should take the six key elements in consideration. According to Robbins and Langton, the six key elements are; “work specialization, departmentalization, chain of command, span of control, centralisation and decentralisation, and formalization” (Robbins & Langton, 2006, p.475).

The first key element work specialization (also known as division of labour), is dividing the activities of an organization into discrete tasks. For instance, in a car manufacturing company, one person will just put on the doors and the other will put on the wheels. It is said that work specialization increases the efficiency of workers. But everything has its limits, so does work specialization. When work specialization becomes perennial, it results in employees’ being sloppy in their work or increased absenteeism of employees. However, some companies learnt that putting employees into groups and allowing them to complete one whole task resulted in employees’ satisfaction, which in turn provided the organization with increased output.

The second key element departmentalisation is congregating employees doing similar tasks. It takes place depending on; the functions performed, products produced, geographic areas the organisation deals with, processes done in organisations and type of customers the organization concentrates on. Departmentalisation by functions performed depends on the organisation’s activities. For instance, if we look at MIFCO (Maldives Industrial Fisheries Company), they will have a department for production, accounting, sales and marketing.

Procter & Gamble is departmentalised by the products produced. “Each major product – such as Tide, Pampers, Charmin and Pringles – is placed under the authority of an executive who has complete global responsibility for that product” (Robbins, Judge and Campbell, 2010, p.431). This increases the efficiency of employees as well as managers because, everything related to certain products are handled by that particular department responsible for it.

Organisations doing international selling activities use departmentalisation by geography. For instance,...


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