There are several reasons to why firms use structure in their business; the main one is that a structure can show how different sections of the firm work together (interrelate) to create one company. For example if the marketing department was spending more than the amount budgeted for promotion then the finance department will identify this and cut their budget because overall costs would be increasing and profits may suffer as a result. Ultimately most companies will want to use interrelation effectively so they can increase profits and performance along with it.
Communicating information is also a main reason to having a structure within a business. It allows employees to know where to go to if they need help of any sort. For example if an employee wanted a new apron in a factory they would ask a senior manager and they would reply from the personnel department.
There are also more modern organisational designs and these have particular emphasis on efficiency, control and stability of a business. Lean structures are about involving and giving increased authority to lower level employees but this technique is only used in industries that professional or technical skills at all levels e.g. Japanese automobile market. Self-managing and flatter levels of hierarchy are much the norm in these types of markets, which imply lean structures. There are also virtual organisations. T
his is where increasingly technology is used within a business so that it can provide an effective communications network and theorists in this field (Barnes and Hunt 2001) argue that this is an ever-growing trend and will eventually be the ultimate type of organisational structure. This technology includes fax, email, teleconferencing, and mobile phones etc.
The Internet has been the most influential form of technology over the past decade and has enabled even small businesses to communicate more efficiently. Fig 4- Source- http://www. operationgadget. com/images/apple_imac_g5-thumb. jpeg Structure and goals suggests that organisations have many departments, which are interdependent to one another. The studying of management is important as it enables you to understand how performance can be improved and this is the aim of many organisations. This tries to identify and explain the structures of employee behaviour, which attribute to overall organisational goals.
This is the basis and core to understanding the relationship between structure and how it affects performance whether it is in a positive or negative manner. The classical school theory is thought to be the origins of organisational analysis and is based on F. W. Taylor’s scientific management theory and it emphasises a formal approach to organisations. The founder of classical school is Henri Fayol a French engineer, he and other classical school writers wanted to develop ideas of management and how it needed to be implemented in organisations which contain manual labourer workers in factories.
Studies and methods of working efficiently were created containing strict instructions for employees hence no room for freedom and individual thought from employees, and setting departmental tasks and goals all to result in harmony and cohesion within the organisation. There are several theorists who created the idea of managing performance and how it is related to motivating a workforce. They are Abraham Maslow’s hierarchy of needs, Douglas McGregor’s Theory X and Y, and Frederick Herzberg’s two-factor theory, Frederick Taylor’s principles of scientific management and Mayo’s human relations school.
For structure and performance Taylor is involved and influential and so I will explain his thoughts and ideas on the subject. Taylor’s ideas were formed at the beginning of the twentieth century. At that time workers were usually controlled by supervisors, these were often fellow workers who were good at their job. Taylor thought that this was inefficient. Taylor believed that all workers were lazy and were only interested in earning money. His idea was that managers should carry out a time and motion study to work out the most efficient way to perform the tasks that make up the job.
Managers would then be appointed to make sure that workers carry out the tasks exactly as planned. Taylor said that managers should study the way workers perform tasks- through in depth analysis, have clear written policies of how to work, carefully select workers for tasks- specialisation, and establish a fair level of performance and pay accordingly- giving employees bonuses and benefits (performance related pay). Fig 5- Source- http://business. enotes. com/images/business-finance/ebf_02_img0158. jpg The theory was that because workers are controlled by managers their productivity will improve.
In practice it was not successful mainly because of the boredom that results from doing the same tasks all day and every day. When Taylor’s ideas were introduced in the 1920’s and 1930’s they sometimes worked in companies that decide to apply it and sometimes failed. McDonalds would not use this theory as it is very time consuming to carry out and because of its age it may not be relevant and applicable to their business. The advantages of this theory are that managers can gain in depth analysis on employees and this would give them a lot of research to base possible improvements from within the business.
The disadvantages are that Taylor’s ideas are very old and industry has changed dramatically since then so his theory is outdated and is mostly irrelevant in current times. Another disadvantage is that people thought there must be more to motivation then just money. Classical school theory is now widely criticised, this is because it is thought to be too simplistic, thoughts were not based on research and most importantly workers were seen as passive objects and structure was based around them when instead as explained earlier structure should be based on characteristics of the workforce.
Nevertheless classical school did start making people think about organisational analysis and paved the way for more in depth studies to take place in future surrounding the issue. A theory that spawned from classical school was the contingency theory. This was based on cognitive thoughts and was created in the late 1950’s. It suggested that organisational structure should be varied and should accommodate and be based around the workforce. The general thought of this theory is that for an organisation to be effective there most be a match between structure and context.
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