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Organisational Structure Essay

1530 words - 7 pages

Organisation structure

Structure relates to a skeletal framework of activities and processes in an organisation and specifies the roles of these in achieving goals and objectives of the organisation. According to (Mullins, 2009), a good structure is highly important due to the fact that decisions on structure are primary strategic decisions which can make or break an organisation. One important aspect of a good structure is the human element. Organisation structure should be designed so as to encourage employees and increase the morale and job satisfaction of organisation members which will result to overall organisation efficiency.

(Mullins, 2006) describes nine basic considerations in ...view middle of the document...

The division of work and grouping together of individuals should be organised according to a basic criterion to establish a coherent link between the activities involved. The division of work and linkage of activities occur in various ways such as specialisation, use of similar resources or common expertise of organisation members as the most commonly used basis for grouping activities. Others include division by product or service, division by location, division by nature of the work performed, division according to common time scales such as shift working, division according to staff employed such as allocation of work based on experience and so on.

Centralisation and decentralisation

The extent of centralisation or decentralisation refers to the point of critical decision making in an organisation which reflects patterns of authority in a structure. In centralised structures decision making authority is within the power of top management while decentralised structures, decision making authority is delegated (Rollinson, 2005). The arguments in favour of centralisation in an organisation entail the easier implementation of a common policy, easier coordination and management control, preventing sub-units from becoming too independent, over-head cost reduction and faster decision making because of the smaller number of people involved. In contrary, arguments for decentralisation include decisions being made at a point closer to operational levels, increased responsiveness to local circumstances, improved level of personal customer service, more flexible structure, control is distributed more evenly which provides opportunity for development for those lower down, and encouraging effect on motivation and morale of staff. Basically, decentralisation tends to be easier to implement in the private sector organisations than public sector ones where procedures and protocols are the order of the day. Decentralisation being a more flexible approach provides support for employee participation and empowerment at all levels which increases innovation and improves technology while centralisation ensures professionalism in all activities by maintaining effective coordination and overall control of the organisations activities as a whole. A mix of both such as being global and local, practically being decentralised with a central control and authority should produce an organisational advantage.

A vivid illustration of decentralisation is the Zara fashion enterprise (cited in Mullins, 2009, p.596), where the company derived its success from integration of design, production, logistics and sales within companies globally rather than separating and outsourcing this different business elements unlike its contemporaries in the fashion industry, while still keeping control of all major operations in Spain. The company rejected rigid organisational structures in favour of a more flexible approach which comes from a highly integrated, fast and efficient form of...

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