I found this week's readings to be not only interesting and thought provoking, but also very applicable to my work life. It caused me to think about how both my company and department are organized, the pros and cons and also made me speculate how it would be if it was changed around. Would I still like my job? If my department was organized differently, what would it be like?
In Organization Structure and Performance: A Critical Review, authors Dan Dalton, William Todor, Michael Spendolini, Gordon Fielding and Lyman Porter discuss how organizational structures affect performance. One area the article dives into is the size of the department, or "subunit" and performance. Some studies the author looked into showed smaller subunits outperformed large subunits; other studies showed large subunits outperformed small subunits. Other studies showed medium sized subunits outperforming large and small subunits. Numerous studies also found no correlation between subunit size and voluntary turnover.
The authors also suggest that having "a relatively flat structure (few hierarchical levels) would...have a wider average span of control." Nohria argues this very same point in Note on an Organizational Structure, saying flatter organizational structures have "broader spans of control" (p. 8).
In the end, I don't think there is a concrete right or wrong answer for how organizations should be structured. I don't think there is a one-size-fits-all formula for how organizations and departments should be grouped. I think the right decision on this depends on the company's culture, evolution and individuals that make up the team. Or, as Gould and Campbell argue, organizations "evolve over time, in fits and starts, shaped more by politics than policies" (p. 5).
Dalton, D., Todor, W., Spendolini M., Fielding, G., and Porter, L.: Organizational structure and performance: a critical review, The Academy of Management Review, Vol. 5, No. 1 (Jan., 1980), pp. 49-64.
Nohria, N. (1995). "Note on Organizational Structure." Harvard Business School.
Gould,M. & Campbell, A. (2002) "Do You Have a Well Designed Organization?" Harvard Business Review.
Lauren, because this article was published over 30 years ago, do you think the advancements in the last few decades (technology, etc) would change the authors' conclusions? Or do you think their assessment holds true today? You also say that organizational structure should fit with the company's culture and individuals. What about its function and environment?
ReplyDeleteCourtney, first off, wow, 1980 was 30 years ago! I think the assessment holds true today, though. I was really focusing in on some of our high-performing teams today with some coworkers, and size had nothing to do with how well they did. Some of the small departments are successful because they are lean and have been working together for a long time, even though they are scattered across the country. Another one of our stellar teams sits in the same wing of one of the floors of the building and have a relatively high amount of turnover. It's also really big group!
DeleteLauren, I enjoyed reading your post. It was really interesting that the research from the article you reference seemed to indicate that no unit size was "best" or that a particular size of unit would guarantee that it would outperform a unit of another size. I agree with you with you that it does seem that there's no perfect solution for any organization when it comes to design. All methods for structuring organizations appear to have strengths and weaknesses - and it seems that some methods will be a strength for an organization during one phase of the organization's life and a weakness during another. This reminds me of the idea of "trade offs" suggested by Nohia (1995); that sometimes organizations will have to endure a partial weakness of one design choice for the good of the organization as a whole. When I think about my organization, I think I can see that it has chosen smaller department sizes (fewer employees and lower costs) as a trade off for higher efficiency (more employees and higher costs). Do you see any trade offs in your organization?
ReplyDeleteThanks for sharing your insights - your post has gotten the cogs and wheels in my brain to start turning.
I agree with you, especially if the company is brand new. Everybody has to be flexible all the time, I think, and being able to adapt to changes is key to survival! As far as trade-offs in my org, I definitely see that! We try to be as lean as possible, but sometimes that comes back to bite us. My team just launched a new intranet site a couple of weeks ago, and because the project was technically finished, our contractor we had working full time on it had to leave. Well, just because the product has launched doesn't mean we can walk away from it and it'll work perfectly. We're now having to carefully balance everything we had going on before, plus the work of what our contractor should be doing to help support the site.
DeleteI'm glad I got your wheels spinning. :)
Lauren,
ReplyDeleteI tend to agree with your main point. I don't think there can really be a 'perfect' way to structure an organization - there are always going to be drawbacks no matter the structure you pick.
For example, I work in a smaller organization, and we are a divisional structure pretty much by necessity. But is necessity the best reason for us to do something? Divisional structures lead to very poor coordination across units and little company-wide initiatives, and it merely becomes about getting the individual job done and keeping it moving.
So, I think the key is to find the structure that brings the most to the table for your organization while taking the least off of it. All of the structures are going to have drawbacks, it's just about finding the drawbacks your organization can work with.
I'd be really interested to hear your thoughts a little more in-depth on the pitfalls of your organization's structure. Perhaps a conversation for another day!
Maybe necessity is the best way to do something if it's the most effective, but this is clearly not the case for your organization! You seem to be working completely separately. A Jewel song from who knows how long ago just popped into my head. A line of the song goes, "we live together separately," and that sounds like your group! You are all right there with each other, but you are so segregated in how you function. I bet that's quite frustrating and it must seem like you are constantly reinventing the wheel.
DeleteLauren - I agree with your final analysis that there is no one-size-fits-all for every organization. Your views sound similar to the contingency theory mentioned by Morgan (2008) in last week's reading. When reading your post I began to think of Fred Taylor and his work as a consultant. I think research and consultant work on a case-by-case basis could go a long way in helping organizations determine what the best structural design is for their marketplace. This would also include analysis of unit size, as well. I think the effectiveness of a unit relative to its size depends a lot on the people and what environment they thrive in.
ReplyDeleteI can't agree more that organizations could really benefit from hiring a consultant to ensure they are structured the most efficient and effective way. The way we have been working lately feels like a constant roller coaster of change: a new boss is here, and he has completely changed the way we do and look at things. He's a numbers guy who came from the alpha dog GE culture. Totally different than the boss we used to have! Even though he's been here for about six months, so much still feels brand new, and we're not really sure if it's us who doesn't get him, or is it him that doesn't get us?? Having a consultant dive into what exactly we're doing and how all of our moving parts fit together is something my group could really benefit from right now. Good point.
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