Outline how different types of organisational structures may enhance or inhibit performance During industrialisation in the mid nineteenth century many firms were of a small size and had very few employees and structure within the business was not of huge importance. At the turn of the twentieth century all this started to change as many businesses were expanding and the need for structure was increasing and so theories on business structure were starting to form to aid these expanding organisations.
Offe (76) a key theorist in this field argued that there are two types of organisation, the first being ‘task continuous’ and the second ‘task discontinuous’. The first involves small firms, employees performing and planning the business themselves and the second involves large firms with many employees many of which perform the roles in the business but have no or limited say on structural views of the business.
There is also another key theorist on organisations, perhaps the most important, Max Weber. He was a German social scientist whose study on bureaucracy had a massive influence on organisations across the whole of society. Weber’s (1970) study of bureaucracy identified five major factors that were required if a company was aiming for a
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They were staff, division of labour- creating specialised departments; for instance in supermarket there would be grocery, fresh, frozen etc, hierarchy- horizontal and vertical positioning of employees, competence- ability and level of skill of the employees must be taken in to consideration when deciding what type of structure to imply on the business, and objectivity- all employees should be treated equally and fairly. Fig 1- Source- http://www. filosofico. net/maxweber. jpg These characteristics are thought to be the most efficient way of achieving success in the modern economy.
Bureaucracy is a key term branded with large organisations; this is because it expects people to follow precisely rules and procedures rather then use personal judgement. This is also related to the autocratic style of management and many modern organisations imply this upon their business. This is usually when the skills required for many of the jobs within the business are simple and repetitive, for example in supermarkets- the manager assigns the employee with several tasks within their first few shifts and these then have to be repeated constantly.
Through this structure employees are able to identify which employees are in positions of authority. Weber then also identified three types of authority- charismatic, traditional and rational, all three suit different organisations but are only ideal types and so organisations are most likely to contain one or more of them or a completely different type of authority within the business. At the base level of formal structure is related to the shape of the organisation- the distribution of employees along different lines of command horizontally and vertically.
This also contains two other major components the division of labour- specialist departments and the other being the division of power and authority- the relationship between the subordinate and the managers. The advantages of using this type of structure is that progression within the business can be achieved and become an incentive to many employees, also costs of products from suppliers will be deducted through economies of scale, which can be positively related directly to performance of a business.
The disadvantages are because of many layers of structure communication can be very difficult and this is a vital factor in order for success in a business, also some employees may feel demoralised or de-motivated because of their position within the hierarchy. In evaluating Weber you can say that he regarded bureaucracies as an efficient and effective form of administration, although many organisations in the 21st century are much more versatile and variable in design and structure of a business.
Weber’s analysis of society was that of a Marxist perspective and this means that a capitalist society exists where there are few people who own all means of production also known as the bourgeoisie and many people who work for them in a manual labour manner- mainly in factories and are known as proletariat. This is why Weber created a theory that demonstrated this separation in society and he was right because it was clearly apparent in British society in the 1800’s.
The next type of structure that was created was known as the concept of Mcdonaldization. This was created by George Ritzer, TheMcDonaldization of society (1993). He linked Weber’s ideas of society to the fast food industry and in particular McDonalds. Ritzer suggested that McDonalds has expanded hugely and at a rapid rate and this has resulted in domination in a range of other industries- like the media, health, leisure, sport and politics.
Ritzer proposes that these industries have been directly affected through the growth of McDonalds and more precisely the eating habits of most of the modern western world and in particular America. Fig 3 Source- http://www. geneticfuture. org/blog/archives/mcdonalds. jpg Ritzer makes out four dimensions which McDonladization updates bureaucratic processes- efficiency, calculability, predictability and control. All four dimensions are apparent in American society for example television ratings are based on quantity and not quality so that one suggests the calculability concept.